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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.

  • LTU Karachi identifies unregistered 100,000 commercial gas connection holders

    LTU Karachi identifies unregistered 100,000 commercial gas connection holders

    KARACHI: The Large Taxpayers Unit (LTU) Karachi on Wednesday said that it has identified over 100,000 persons having commercial gas connections but not registered with the Federal Board of Revenue (FBR).

    This was disclosed by chief commissioners of LTU Karachi at a press conference. The media interaction is part of the strategy to update about performance of tax machinery.

    Zulfiqar Memon and Girdhari Mal, the chief commissioners of the LTU Karachi, informed that the persons had been identified through data verification obtained from Sui Southern Gas Company Limited (SSGCL) and available record from tax offices.

    They said that the FBR would enforce mandatory sales tax registration on those commercial gas connection holders.

    About measures against tax evasion, they said that in the first four months of current fiscal year the unit examined financial records of companies and issued notices to around 10 companies for concealing Rs100 billion. They said that one company alone evaded Rs23 billion.

    The LTU officers said that the unit registered growth of 16 percent in revenue collection during first four months of current fiscal year. The revenue collection of the unit was Rs402.16 billion during July – October 2019/2020 as compared with Rs346.86 billion in the corresponding period of the last fiscal year.

    They attributed the revenue growth to the recent reforms initiative by the government. They said that the reforms had resulted in economic activities and subsequently rise in revenue collection.

    Sector wise major revenue contributor was banking sector followed by refineries, oil marketing companies and textile etc.

    The LTU Karachi has jurisdiction over 5,056 big turnover units. As per criteria the LTU Karachi will have jurisdiction over a company having over Rs400 million turnover or Rs20 million as tax contribution in a year.

    Talking about the recent reforms initiatives by the government including proposed formation of Pakistan Revenue Authority (PRA), the officials said that the filed units were not against the government plan.

    However, they said, the FBR chairman had assured to address grievances of tax employees related to reform program.

  • FBR notifies transfers, postings of IR officers

    FBR notifies transfers, postings of IR officers

    ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday announced transfers and postings of Inland Revenue (IR) officers in BS-18-20 with immediate effect and until further orders.

    The FBR notified transfers and postings of following officers:

    01. Sajjad Taslim Azam (Inland Revenue Service/BS-20) is presently posted as Commissioner-IR, (Jhang Zone) Regional Tax Office, Faisalabad. He is assigned the additional charge of the post of Commissioner-IR (IP/TFD/HRM), RTO, Faisalabad in addition to his own duties.

    02. Muhammad Saleem (Inland Revenue Service/BS-19) has been transferred and posted as Commissioner Inland Revenue (OPS) (IP/TFD/HRM) Regional from the post of Tax Office, Multan Commissioner-IR, (OPS) (IP/TFD/HRM) Regional Tax Office, Faisalabad.

    03. Sahibzada Umar Riaz (Inland Revenue Service/BS-19) has been transferred and posted as Secretary, (IR Operations Wing) Federal Board of Revenue (Hq), Islamabad from the post of Additional Commissioner-IR, Regional Tax Office II, Lahore.

    04. Abdul Rehman Khilji (Inland Revenue Service/BS-19) has been transferred and posted as Additional Commissioner Inland Revenue Large Taxpayers Unit, Karachi from the post of Additional Commissioner-IR, Corporate Regional Tax Office, Karachi.

    05. Mehran Khan (Inland Revenue Service/BS-18) has been transferred and posted as Deputy Commissioner Inland Revenue Large Taxpayers Unit, Karachi from the post of Deputy Commissioner-IR, Corporate Regional Tax Office, Karachi.

    06. Ms. Birjees Fayyaz (Inland Revenue Service/BS-18) has been transferred and posted as Deputy Commissioner Inland Revenue Large Taxpayers Unit, Karachi from the post of Deputy Commissioner-IR, Regional Tax Office II, Karachi.

    07. Shah Bahar (Inland Revenue Service/BS-18) has been transferred and posted as Deputy Commissioner Inland Revenue Large Taxpayers Unit, Islamabad from the post of Deputy Commissioner-IR, Regional Tax Office, Islamabad

    The FBR said that the officers who are drawing performance allowance prior to issuance of this notification shall continue to draw this allowance on the new place of posting.

  • Complete list of withholding tax rates for tax year 2020

    Complete list of withholding tax rates for tax year 2020

    ISLAMABAD: Following is the complete list of withholding tax rates applicable for tax year 2020. The rates have been updated by the Federal board of Revenue (FBR) till June 30, 2019.

    The withholding tax card also included the 100 percent higher tax rates for persons not on the Active Taxpayers List (ATL).

  • FBR officials warned of disciplinary action for non-observance of office timings

    FBR officials warned of disciplinary action for non-observance of office timings

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday warned of disciplinary action to its officers and officials for not observing office timing.

    A circular issued by the FBR stated that the authority had notices with great concern that some officers/officials of FBR Headquarters and its field formations were not observing office timings.

    “FBR HQ is consistently advising in the past to observe the office timings, however, complaints are being still received for non-observance of office timing.”

    The FBR directed all the officers/officials of FBR HQ and its field formations to strictly observe the notified office timings and facilitate the public, otherwise, strict disciplinary action would be taken against delinquents under E&D Rules, 1973.

  • Applicable withholding sales tax rates on various supplies

    Applicable withholding sales tax rates on various supplies

    KARACHI: Federal Board of Revenue (FBR) has notified withholding sales tax rates to be deducted / collected on various supplies by withholding agents.

    The FBR recently updated Sales Tax Act, 1990 and updated sales tax rates to be collected on various supplies under sub-section 7 of section 3 of the Act.

    The tax shall be withheld by the buyer at the rate as specified in the Eleventh Schedule, by any person or class of persons as withholding agent for the purpose of depositing the same, in such manner and subject to such conditions or restrictions as the Board may prescribe in this behalf through a notification in the official Gazette.

    Following rate of withholding sales tax shall be applicable:

    01. 1/5th of Sales Tax as shown on invoice to be collected from registered persons by (a) Federal and provincial government departments; autonomous bodies; and public sector organizations; (b) Companies as defined in the Income Tax Ordinance, 2001 (XLIX of 2001)

    02. 1/10th of Sales Tax as shown on invoice to be collected from person registered as a wholesaler, dealer or distributor by (a) Federal and provincial government departments; autonomous bodies; and public sector organizations; (b) Companies as defined in the Income Tax Ordinance, 2001 (XLIX of 2001)

    03. Whole of the tax involved or as applicable to supplies on the basis of gross value of supplies from unregistered persons by Federal and provincial government departments; autonomous bodies; and public sector organizations

    04. 5 percent of gross value of supplies from unregistered persons by companies as defined in the Income Tax Ordinance, 2001 (XLIX of 2001)

    05. Whole of sales tax applicable from person providing advertisement services by registered persons as recipient of advertisement services

    06. Whole of sales tax applicable from unregistered persons by registered persons purchasing cane molasses.

    The rates for withholding or deduction by the withholding agents not applicable to following goods and supplies:

    (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) Vegetable ghee and cooking oil;

    (v) Telecommunication services;

    (vi) Goods specified in the Third Schedule to the Sales Tax Act, 1990;

    (vii) Supplies made by importers who paid value addition tax on such goods at the time of import; and

    (viii) Supplies made by an Active Taxpayer as defined in the Sales Tax Act, 1990 to another registered persons with exception of advertisement services.

  • Return filing hits new peak of 2.676 million on ATL conditions

    Return filing hits new peak of 2.676 million on ATL conditions

    ISLAMABAD: The condition of 100 percent higher withholding tax rates for persons not appearing on Active Taxpayers List (ATL) increased the income tax return filing for tax year 2018 to a new peak of 2.676 million by November 10, 2019.

    According to weekly ATL for tax year 2018 issued by Federal Board of Revenue (FBR) on Monday the number of return filers increased to 2.676 million till November 10, 2019 as compared with 2.667 million till returns filed as on November 03, 2019.

    So far the return filing grew by 45.43 percent in tax year 2018 when compared with 1.84 million returns received by the FBR for tax year 2017.

    The appearance of taxpayers on ATL guarantees the lower rate of withholding tax to be collected on various transactions.

    Through Finance Act, 2019 Tenth Schedule was introduced to Income Tax Ordinance, 2001 under which persons not appeared on the ATL, even filed the return, would liable to pay 100 percent more withholding tax amount.

    The FBR issues ATL on every year on March 01 on the basis of return filed by taxpayers by due date for relevant tax year.

    The FBR issued latest ATL on March 01, 2019 on the basis of returns filed for tax year 2018. Since the date for filing returns extended up to August 09, 2019 for tax year 2018, the names of those return filers were added to the updated ATL.

    By August 09, 2019 the number of return filers was increased to 2.5 million. However, additional 0.167 million returns were been filed after payment of late filing surcharge.

    The FBR in an explanatory note said that restriction on including a person’s name on ATL, if the person has not filed Tax Return by the due date specified by Income tax authorities was introduced through Finance Act, 2018.

    However, through Finance Act, 2019 a person’s name can be part of ATL, even if the person has filed Tax Return after the due date specified by Income Tax authorities, the FBR said.

    Furthermore, it added, a surcharge for placement on ATL after due date of filing of Tax Return will be charged at Rs1,000 from individuals, Rs10,000 from Association of Persons (AOPs) and Rs20,000 from companies.

    FBR sources said that people were filing their income tax returns for tax year 2018 along with late surcharge, despite the due date for tax year 2019 had been prescribed, for avoiding 100 percent withholding tax rates.

    They said that the current ATL would remain applicable till February 29, 2020 as new ATL on the basis of return filed for tax year 2019 would be issued on March 01, 2020.

  • Tax rules for computation of profits, gains of insurance business

    Tax rules for computation of profits, gains of insurance business

    KARACHI: Federal Board of Revenue (FBR) has issued updated rules for the computation of profits and gains of the insurance business under Income Tax Ordinance, 2001.

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  • FBR receives information of car buyers from withholding agents

    FBR receives information of car buyers from withholding agents

    ISLAMABAD: Federal Board of Revenue (FBR) has received information of persons who purchased motor vehicles during tax year 2019.

    The tax authorities will cross check the sale or purchase of motor vehicles through income tax returns for tax year 2019, which can be filed by November 30, 2019.

    The FBR sources said that the tax authorities had received information of persons who purchased motor vehicles 1,000 CC and above.

    A person is required to file income tax returns if he purchases a motor car in a tax year irrespective of his taxable income falls below or above the threshold.

    The sources told PkRevenue.com that the FBR received the information car manufacturers, dealers of motor vehicle, registration authorities, bank and leasing companies.

    They said that these withholding agents are required to furnish withholding statements, which must contain information of sales or lease of motor vehicles.

    The withholding agents have provided details of persons included: name, NTN/CNIC, registration number of the motor vehicle, motor vehicle make/model/engine capacity/year of manufacture, date of first registration of vehicle in Pakistan, registered capacity/laden weight of the vehicle, ex-factory price of motor vehicle.

  • FBR issues guidelines to facilitate issuance of sales tax refunds in 72 hours

    FBR issues guidelines to facilitate issuance of sales tax refunds in 72 hours

    ISLAMABAD: Federal Board of Revenue (FBR) has issued guidelines to facilitate taxpayers in issuance of sales tax refunds within 72 hours.

    The FBR issued user guidelines for filing Annexure – H i.e. details of stock position of sales tax registered persons. This annexure is mandatory for refund claimants and they may submit statement within 120 days from due date of return filing of particular tax period; other registered persons are encouraged to provide these details, the FBR said.

    The FBR advised the sales tax registered persons to use Annexure – H to upload transactions for the month i.e. purchase, import and consumption only.

    Opening and closing balances are derived/calculated automatically. Same is with Excel uploading otherwise objection of duplicate value will arise.

    The FBR said that opening and closing balance in sales tax return must match with Annexure – H.

    It is further advised to sales tax registered persons to use Annexure – H column consumed / exported during the month (domestic zero rated / export for amount of refund on export mentioned in return (minus tax on local supplies).

    The FBR advised the sales tax registered persons to use column consumed / sold during the month (domestic taxable supplies) for consumption against domestic supplies in relation to output tax declared in return.

    Mark invoice wise inadmissible input tax in Annexure – A relating to SRO 490. Do not attach / claim GD of imports or/and exports that have already been claimed or not relevant.

    The FBR said that credit brought forward from previous claim will automatically be available in Annexure – H.

    The FBR added new items in list of items: sizing, yarn dyeing, yarn doubling, weaving, knitting, processing (bleaching, dyeing and printing), stitching, embroidery.

    The FBR said that RCPC for refund preparation system has been replaced with Annexure – H for all types of sales tax refund claims from July 2019 onward.

    Properly filled Annexure – H without objections and anomalies of data will ensure processing in 72 hours.

  • Jewelers, real estate agents to maintain register, report suspicious transactions: draft rules issued

    Jewelers, real estate agents to maintain register, report suspicious transactions: draft rules issued

    ISLAMABAD: Federal Board of Revenue (FBR) has proposed to make mandatory for jewelers and real estate agents to report suspicious transactions. In this regard the FBR issued draft rules through SRO 1320(I)/2019 to make amendments in Income Tax Rules, 2002.

    As per the draft rules, the designated persons as jewelers and real estate agents should maintain documents and records, where the value of transaction exceeds Rs2 million in case of immovable properties and Rs one million in other cases.

    The FBR said that the designated persons would require to obtain and maintain the following relating to its buyers and sellers, namely:

    In case of an individual any of the following documents should be obtained by jewelers and real estate agents:

    i. copy of computerized National Identity Card (CNIC) issued by National Database and Registration Authority (NADRA).

    ii. copy of National Identity Card for Overseas Pakistanis (NICOP) issued by NADRA.

    iii. copy of Pakistan Origin Card (POC) issued by NADRA.

    iv. copy of Alien Registration Card (ARC) issued by NADRA, and

    v. copy of passport, having valid visa on it or any other proof of legal stay along with the passport (foreign nationals only).

    The jewelers and real estate agents also required to keep a list of all such customers where the business transaction was refused or needed to be closed either on account of failure of the customer to provide the relevant documents or the original documents for viewing as required.

    Regarding furnishing of information, according to the draft rules, the sale and purchase register for the immediately preceding calendar month shall be uploaded by the designated persons on the IRIS online system within 15 days of the end of the preceding calendar month for transactions.

    The draft rules said that the designated persons would mark a transaction as suspicious in the IRIS online system if the person has reason to believe that the transaction or a pattern of transactions of which the transaction is a part:

    (a) involves funds derived otherwise than from the business activity or assets declared to the income tax authorities;

    (b) is designed to evade any requirement of the Income Tax Ordinance, 2001 or to conceal the beneficial owner or his activity.

    (c) has no apparent economic or lawful purpose after examining the available facts, including the background and possible purpose of the transaction; or

    (d) involves financing of terrorism, including fund collected, provided, used or meant for, or otherwise linked or related to, terrorism, terrorist acts or organization and individual concerned with terrorism.

    According to the draft rules, the designated persons have also been asked to mark as suspicious transaction if the buyer or seller –

    (a) frequently changes bank accounts;

    (b) uses a bank account other than an account maintained in the name of beneficial owner;

    (c) makes or receives payment in cash or primarily in cash; or

    (d) maintains a creditor or debtor account with the designated person and instructs the designated person to adjust the balance of his account against a creditor debtor account of another buyer or seller.