KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Tuesday praised the government for appointing a professional as chairman of the Federal Board of Revenue (FBR).
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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.
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FBR reinstates nine customs officers into service on court order
ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday reinstated nine customs officials into service following an order of Supreme Court of Pakistan.
The FBR said that in pursuance of judgment dated November 26, 2018 passed by Federal Service Tribunal, Islamabad duly upheld by the Supreme Court of Pakistan through order dated April 17, 2019, the following officers, who were compulsorily retired from service through FBR notification dated May 08, 2017 are hereby reinstated into service with effect from May 08, 2017 i.e. the date of their compulsory retirement:
01. Qaiser Khan Loni, ex-principal appraiser, Model Customs Collectorate Quetta.
02. Muhammad Zaman Mazari, ex-Inspector, MCC Quetta
03. Haji Zahir Ali, ex-Inspector, MCC Quetta
04. Shireen Subhan, ex-Inspector, MCC Peshawar
05. Muhammad Akram, ex-Inspector, MCC Quetta
06. Faiz Muhammad Khoso, ex-Inspector, MCC Quetta
07. Musa Kha Awan, ex-Inspector, MCC Quetta
The FBR said that matter of back benefits for the intervening period from May 08, 2017 till their re-instatement, during which they remained out of service, would depend upon final outcome of denovo proceedings to be initiated against them in due course of time in the light of federal service tribunal judgment and the apex court order.
The FBR said that in pursuance of judgment dated February 01, 2018 passed by Federal Service Tribunal, Lahore duly upheld by the Supreme Court of Pakistan dated April 04, 2019, the FBR’s notifications dated May 08, 2017 and Dated August 22, 2017 are hereby withdrawn and following officers of customs service are reinstated into service with effect from May 08, 2017 i.e. date of their removal from service:
01. Waqar Ahmed Cheema, ex-Superintendent, Directorate of Intelligence and Investigation, FBR, Lahore
02. Aziz-ur-Rehman, ex-Inspector, MCC Islamabad
The FBR said that matter of back benefits for the intervening period from May 08, 2017 till their re-instatement, during which they remained out of service, would depend upon final outcome of denovo proceedings to be initiated against them in due course of time in the light of federal service tribunal judgment and the apex court order.
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ABAD welcomes new chairman FBR
KARACHI: Association of Builders and Developers of Pakistan (ABAD), welcoming the appointment of a leading Chartered Accountant and tax expert Shabbar Zaidi as the Chairman of Federal Board of Revenue (FBR), has hoped that Shabbar Zaidi will bring in new strategy to solve problems of business community of the country as well as creating new venues for tax collection rather than taxing already taxed people.
Chairman ABAD Muhammad Hassan Bakshi, Senior Vice Chairman Anwar Dawood, Vice Chairman Abdul Kareem Adhia and Chairman Southern Region Ibrahim Habib, in a statement, said that the PTI-led federal government has taken right decision by appointing a technocrat from private sector as Chairman FBR. This decision will have good impact on revenue generation and solution of tax-related problem as Shabbar Zaidi is well-known in business circles as well as in bureaucracy of FBR as a tax expert and provincial and federal governments used to take advice from him, they said. Recently, in an interview, Shabbar Zaidi had said that he will try his best to increase tax to GDP ratio from 13 percent to 26 percent.
ABAD office-bearers said that widening tax net is necessary for more tax collection. They demanded of the federal government to announce and implement much-talked Tax Amnesty Scheme as soon as possible for boosting revenue collection.
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FBR, traders discuss broadening of tax base
ISLAMABAD: A Consultative Meeting between the Traders Associations and FBR representatives was held in the Broadening Tax Base Zone (BTB), Islamabad to find ways of broadening the tax base.
The Consultative Meeting was chaired by Mir Badshah Khan Wazir, DG, BTB and was attended by Commissioner BTB (HQ) and Commissioner BTB Zone Islamabad.
The BTB Zone Islamabad had invited Traders Association of G-11 Markaz and F-11 Markaz, Islamabad to seek business community’s views on broadening the tax base.
The Traders Associations were represented by Aftab Gujjar and Mahar Khuda Dad, Presidents of Traders Associations of G-11 and F-11 Markaz respectively along with their office bearers.
The Director General BTB apprised the participants about the significance of broadening of tax base in enhancing national tax revenue.
He stated that due to smaller tax base, the burden gets shifted to existing taxpayers. He stressed on the need to have cooperation of trade bodies in the identification and enrollment of potential taxpayers and sought their help to hold facilitation camps in their respective areas.
The representatives of trade bodies appreciated the initiative of DG BTB for holding the consultative meeting.
They shared views on the difficulties’ faced by the business community in the enrollment and filing of returns.
They advocated the idea of fixed tax regime for the small traders. They agreed to extend cooperation in holding awareness and enforcement camps of BTB Zone in their respective areas.
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Meeting reviews progress on FATF Action Plan
ISLAMABAD: Dr. Abdul Hafeez Shaikh, Adviser to Prime Minister on Finance, Revenue and Economic Affairs on Monday chaired a meeting to review progress on Financial Action Task Force (FATF) Action Plan.
The Secretary Finance updated all the key stakeholders on the critical nature of the meeting, serious challenges at hand and top priority that is being assigned by the government.
The chair was updated by all the key stakeholders regarding progress made by Pakistan on FATF Action Plan.
The stakeholders demonstrated coordination and commitment to achieve this national objective.
The finance adviser advised all stakeholders to work round the clock and give highest priority, efforts as well as extra time for achieving and surpassing to FATF action plan.
The meeting was attended by Secretary Finance, Secretary Interior, Chairman FBR, Chairman SECP, Deputy Governor SBP, Director General FMU, Director General CT Ministry of Foreign Affairs, Director General CT NACTA and representatives of Law enforcement and intelligence agencies.
Earlier in February 2019 meetings of Financial Action Task Force (FATF) took place at OECD, Paris to review the compliance of a number of countries with the international standards on Anti-Money Laundering and Counter Financing of Terrorism (AML-CFT).
Pakistan was earlier placed by FATF in its Ongoing Compliance Document in view of an Action Plan undertaken by it to strengthen its CFT Regime.
The FATF reviewed the progress made by Pakistani authorities concerned with CFT role, based upon an analysis carried out by Asia-Pacific Joint Group.
The FATF noted that Pakistan took several steps to implement the Action Plan including by undertaking Risk Assessment of Terrorism Financing and Cash Smuggling in the country.
The FATF advised Pakistan for continue work on action plan, included:
(1) adequately demonstrating its proper understanding of the TF risks posed by the terrorist groups above, and conducting supervision on a risk-sensitive basis;
(2) demonstrating that remedial actions and sanctions are applied in cases of AML/CFT violations, and that these actions have an effect on AML/CFT compliance by financial institutions;
(3) demonstrating that competent authorities are cooperating and taking action to identify and take enforcement action against illegal money or value transfer services (MVTS);
(4) demonstrating that authorities are identifying cash couriers and enforcing controls on illicit movement of currency and understanding the risk of cash couriers being used for TF;
(5) improving inter-agency coordination including between provincial and federal authorities on combating TF risks;
(6) demonstrating that law enforcement agencies (LEAs) are identifying and investigating the widest range of TF activity and that TF investigations and prosecutions target designated persons and entities, and persons and entities acting on behalf or at the direction of the designated persons or entities;
(7) demonstrating that TF prosecutions result in effective, proportionate and dissuasive sanctions and enhancing the capacity and support for prosecutors and the judiciary; and
(8) demonstrating effective implementation of targeted financial sanctions (supported by a comprehensive legal obligation) against all 1267 and 1373 designated terrorists and those acting for or on their behalf, including preventing the raising and moving of funds, identifying and freezing assets (movable and immovable), and prohibiting access to funds and financial services;
(9) demonstrating enforcement against TFS violations including administrative and criminal penalties and provincial and federal authorities cooperating on enforcement cases;
(10) demonstrating that facilities and services owned or controlled by designated person are deprived of their resources and the usage of the resources.
The FATF urged Pakistan to swiftly complete its action plan, particularly those with timelines of May 2019.
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Shabbar Zaidi appointed as 26th FBR chairman
The federal government has appointed Shabbar Zaidi as the Chairman of the Federal Board of Revenue (FBR). This significant announcement, made by Prime Minister Imran Khan during a media interaction on Monday, marks a departure from tradition as Zaidi becomes the first chairman selected from the private sector.
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Withholding tax rates on payment for goods and services during Tax Year 2019
KARACHI: Federal Board of Revenue (FBR) has updated withholding tax card for tax year 2019 amendment through Finance Supplementary (Second Amendment) Act, 2019.
Following are the withholding tax rates applicable on payment for goods and services under Section 153 of Income Tax Ordinance, 2001.
Under this section every withholding agent prescribed under the ordinance shall collect withholding tax from resident person, and permanent establishment in Pakistan of a non-resident at the time the amount is actually paid.
The withholding tax rates under Section 153(I)(a):
For sale of rice, cotton seed oil and edible oil the tax rate shall be 1.5 percent of gross amount.
Supply made by distributors of fast moving consumer goods shall be 2 percent of gross amount in case of company and 2.5 percent of gross amount in case of other than company.
For sale of any other goods:
(i) in the case of company the filer of income tax return shall pay 4 percent and the rate of withholding tax shall be 8 percent for non-filer.
(ii) In the case of other than companies the tax rate for filer shall be 4.5 percent and 9 percent for non-filer.
The FBR said that no deduction of tax where payment is less than Rs75,000 in aggregate during a financial year.
The withholding tax rate for transport services under Section 153(1)(b) shall be two percent.
All others under the section shall be:
(i) in the case of companies the filer shall pay 8 percent and 14.5 percent for non-filer.
(ii) in all other than company taxpayers the withholding tax shall be 10 percent for filer and 17.5 percent for non-filer.
(iii) Person making payment to electronic and print media for advertising services: filer shall pay 1.5 percent; non-filer shall pay 12 percent; and non-filer other than company shall pay 15 percent.
The FBR said that no deduction of tax where payment is less than Rs30,000 in aggregated during a financial year.
The rate of withholding tax on execution of contracts under Section 153(1)(c) shall be:
(i) in case of sportsperson the rate shall be 10 percent
(ii) in the case of companies the withholding tax rate for filers shall be 7 percent and 14 percent for non-filers.
(iii) In the case of other than companies the rte of withholding tax shall be 7.5 percent for filers and 15 percent for non-filers.
Every exporters or export house shall deduct tax on payments in respect of services of stitching, dying, printing etc. received or provided under Section 153(2) the withholding tax rate shall be one percent. -
Sales Tax Act 1990: No suit shall lie against government servant
KARACHI: The sales tax law had explained that no suit, prosecution or other legal proceeding shall lie against the federal government or against any public servant in respect of any order passed in good faith.
The updated Sales Tax Act, 1990 issued by the Federal Board of Revenue (FBR) explained the bar of suits, prosecution and other legal proceedings under this act.
Section 51: Bar of suits, prosecution and other legal proceedings
Sub-Section (1): No suit shall be brought in any Civil Court to set aside or modify any order passed, any assessment made, any tax levied, any penalty imposed or collection of any tax made under this Act.
Sub-Section (2): No suit, prosecution or other legal proceeding shall lie against the Federal Government or against any public servant in respect of any order passed in good faith under this Act.
Sub-Section (3): Notwithstanding anything in any other law for the time being in force, no investigation or inquiry shall be undertaken or initiated by any governmental agency against any officer or official for anything done in his official capacity under this Act, rules, instructions or direction made or issued thereunder without the prior approval of the Board.
Section 52: Appearance by authorized representative
A registered person required to appear before the Appellate Tribunal or an officer of 2[Inland Revenue] in connection with any proceedings under this Act may, in writing, authorize any person having such qualification as may be prescribed to represent him or appear on his behalf.
Section 52A: e-intermediaries to be appointed
Sub-Section (1): Subject to such conditions, limitations and restrictions, the Board may, by a notification in the official Gazette, appoint a person to electronically file return under Chapter V and such other documents electronically, as may be prescribed from time to time, on behalf of a person registered under section 14.
Sub-Section (2): A person registered under section 14 may authorize an e-intermediary to electronically file return or any other documents, as specified in sub-section (1).
Sub-Section (3): The return or such other documents filed by an e-intermediary on behalf of a registered person shall be deemed to have been filed by that registered person.
Sub-Section (4): Where this Act requires anything to be done by the registered person and if such thing is done by an e-intermediary authorized by the registered person under sub-section (2), unless the contrary is proved, shall be deemed to have been done with the knowledge and consent of such registered person so that in any proceedings under this Act, the registered person shall be liable as if the thing has been done by him.
Sub-Section (5): Where an e-intermediary, authorized by a registered person under sub-section (2) to act on his behalf, knowingly or willfully submits a false or incorrect information or document or declaration with an intent to avoid payment of tax due or any part thereof or claiming a tax credit or a refund that is not due to the registered person, such e-intermediary shall be jointly and severally responsible for recovery of the amount of tax short paid or the amount refunded in excess as a result of such incorrect or false information or document or declaration, without prejudice to any other action that may be taken against him under the relevant provisions of the law.
Sub-Section (6): The Board may, by notification in the official Gazette, prescribe rules for the conduct and transaction of business of e- intermediaries, including their appointment, suspension and cancellation of appointment, subject to such conditions as specified therein.
Section 53: Estate of deceased person
The tax liability of a deceased registered person under the Act shall be the first charge on his estate in the hands of his successors.
Section 54: Estate in bankruptcy
Sub-Section (1): If a registered person is declared bankrupt, the tax liability under this Act shall pass on to the estate in bankruptcy if it continues to operate the business.
Sub-Section (2): If tax liability is incurred by an estate in bankruptcy, the tax is deemed to be a current expenditure in the operations of the estate in bankruptcy and shall be paid before the claims preferred by other creditors are settled.
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FBR provisionally revokes sales tax registration suspension of Hascol Petroleum
KARACHI: Federal Board of Revenue (FBR) has provisionally revoked the suspension of sales tax registration of M/s. Hascol Petroleum Limited on directives issued by Sindh High Court.
A communication sent to Pakistan Stock Exchange (PSX) said that the company had filed a constitution petition before the Sindh High Court against the FBR challenging the order issued by Large Taxpayers Unit (LTU) Karachi for suspension of sales tax registration of the company.
“Upon directors of the Sindh High Court, the commissioner Inland Revenue, FBR has by order May 03, 2019 provisionally revoked the suspension of the sales tax registration of the company with immediate effect,” the company said, adding that consequently the sales tax registration of the company is operative and effective as of date.
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Sales Tax Act 1990: ownership transfer of taxable activity
KARACHI: The sales tax law has explained application of sales tax on taxable activity or transfer of ownership.
According to updated Sales Tax Act, 1990 issued by Federal Board of Revenue (FBR) the law explained the sales of taxable activity or transfer of ownership.
Section 49: Sales of taxable activity or transfer of ownership
Sub-Section (1): In case of termination of taxable activity or part thereof or its sale or transfer of ownership to a non-registered person, the possession of taxable goods or part thereof by the registered person shall be deemed to be a taxable supply and the registered person shall be required to account for and pay the tax on the taxable goods held by him:
Provided that if the tax payable by such registered person remains unpaid, the amount of unpaid tax shall be the first charge on the assets of the business and shall be payable by the transferee of business.
(2) In the case of sale or transfer of ownership of a taxable activity or part thereof to another registered person as an ongoing concern, the taxable goods or part thereof shall be transferred to the new owner through a zero-rated invoice and the sales tax chargeable thereon shall be accounted for and paid by the registered person to whom such taxable activity or part thereof is transferred.