Syed Shabbar Zaidi, Chairman of the Federal Board of Revenue (FBR), revealed on Friday that a new audit framework is set to be introduced next week, aiming to streamline tax procedures and enhance ease of compliance for taxpayers.
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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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Inland Revenue offices to remain open on September 28
Islamabad, September 27, 2019 – The Federal Board of Revenue (FBR) has announced that the offices of Inland Revenue will remain open on Saturday, September 28, 2019.
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FBR says file income tax return before expiry date to avoid three-year jail term
ISLAMABAD: Federal Board of Revenue (FBR) has said that non-filers of income tax returns may face jail term up to three years.
The FBR in its ongoing campaign for return filing for tax year 2019, said on Thursday that non-filing of income tax return is an offence and besides other fine and penalties the non-compliant taxpayer may face imprisonment for one to three years.
The FBR asked the persons having taxable income to file their annual return by September 30, 2019.
Explaining the benefit of filing returns, the FBR said that the person filing the return within due date would be added to Active Taxpayers List (ATL).
The advantage of inclusion into ATL, the return filer within the due date will not pay 100 percent increase in withholding tax.
The FBR further said that the late filing of return i.e. beyond September 30 will attract fine and penalty as well.
It said that the return filing has been made easier for salaried persons. The salaried persons may file their income tax returns through their smart phones by downloading TaxAssan application.
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FBR urges taxpayers for return filing by due date to get ATL status
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Inland Revenue offices to remain open till midnight on Sept 30 for tax collection
ISLAMABAD: All the offices of Inland Revenue will remain open till 12:00 midnight on September 30, 2019 for the collection of duty and taxes and facilitate income tax return filing.
The Federal Board of Revenue (FBR) on Thursday issued an office order directing all the chief commissioners of Large Taxpayers Units (LTUs)/Regional Tax Offices (RTOs) and Corporate RTOs to observe extended working hours till 12:00 midnight on Monday September 30, 2019 to facilitate the taxpayers in payment of duties and taxes and filing of income tax returns and statements.
The chief commissioners have also been asked to establish liaison with State Bank of Pakistan (SBP) and authorized branches of National Bank of Pakistan to ensure transfer of tax collection by these branches on September 30, 2019 to the respective branches of SBP on the same date.
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FBR urges taxpayers for return filing by due date to get ATL status
KARACHI: Federal Board of Revenue (FBR) on Thursday urged individuals/companies to file their annual returns by due date in order to get their names into Active Taxpayers List (ATL).
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Transfer of funds through misdeclaration included into punishable offences
KARACHI: Federal Board of Revenue (FBR) has included illegal transfer of funds through mis-declaration into the list of punishable offences.
The FBR issued Customs Act, 1969 updated June 30, 2019 incorporating changes brought through Finance Act, 2019.
The customs officials said that a new section 32C was introduced to Customs Act, 1969 through Finance Act, 2019 for including misdeclaration of value for illegal transfer of funds into or out of Pakistan as punishable offence under the customs law.
Section 32C: Mis-declaration of Value for illegal transfer of funds into or out of Pakistan.
(1) Without prejudice to any action that may be taken under this Act or any other law for the time being in force, if any person overstates the value of imported goods or understates the value of exported goods or vice versa, or using other means including short-shipment, over-shipment, with a view to illegally transferring funds into or out of Pakistan, such person shall be served with a notice to show cause within a period of two years from the date of detection of such mis-declaration as to why penal action shall not be initiated:
Provided that if goods have not been cleared from customs, such goods shall also be liable to be seized:
Provided further that a team consisting of Additional Collector, duly assisted by an expert in the relevant field and an officer of State Bank of Pakistan (SBP) as specified, shall submit a report in writing with evidence for the Chief Collector. The said report shall also be furnished to the SBP for action, if any, under the law regulated by SBP.
(2) Any proceedings under this section, shall not be initiated, without the explicit approval of Board.
The customs officials said that if any person commits offence under this section then such person shall be liable to penalty not exceeding two hundred thousand rupees or three times the value of goods in respect of which such offence is committed whichever is greater; and such goods shall be liable to confiscation.
Further, upon conviction by a special judge the offender shall be liable to imprisonment for a term not exceeding five years and to a fine which may extend up to one million rupees.
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Resident having foreign income above $10,000 required to file return, wealth statement
KARACHI: A resident person having foreign income of above $10,000 is required to income tax return and wealth statement from tax year 2019 and onwards.
According to officials of Federal Board of Revenue (FBR) the income tax return and wealth statement filing had been made mandatory for a Pakistani individual having foreign income above $10,000 or having foreign assets above $100,000.
The officials said that the law was introduced through Finance Act, 2018 and from tax year 2019 such persons are required to file their income tax returns.
Through Finance Act, 2018, Section 116A was inserted to Income Tax Ordinance, 2001, which stated:
Section 116A: Foreign income and assets statement.
(1) Every resident taxpayer being an individual having foreign income of not less than ten thousand United States dollars or having foreign assets with a value of not less than one hundred thousand United States dollars shall furnish a statement, hereinafter referred to as the foreign income and assets statement, in the prescribed form and verified in the prescribed manner giving particulars of—
(a) the person’s total foreign assets and liabilities as on the last day of the tax year;
(b) any foreign assets transferred by the person to any other person during the tax year and the consideration for the said transfer; and
(c) complete particulars of foreign income, the expenditure derived during the tax year and the expenditure wholly and necessarily for the purposes of deriving the said income.
(2) The Commissioner may by a notice in writing require any person being an individual who, in the opinion of the Commissioner on the basis of reasons to be recorded in writing, was required to furnish a foreign income and assets statement under sub-section (1) but who has failed to do so to furnish the foreign income and assets statement on the date specified in the notice.
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FATC Cell established at FBR Chairman office
ISLAMABAD: A cell of Financial Action Task Force (FATF) has been established at the office of Chairman, Federal Board of Revenue (FBR) Headquarter, Islamabad to ensure timely completion of FATF related issues, a notification said on Wednesday.
The FATF CELL will serve as focal point for all activities related to FBR’s compliance to FATF issues.
The FATF Cell shall:
i. Make periodical reports/papers/briefs for discussion in the FATF related meetings.
ii. Coordinate with FATF Cell at Intelligence and Investigation (I&I) FBR, Islamabad and all other agencies related to FATF action plan.
iii. Conduct research and compile reports for effective improvement of the FATF Cell working in FBR HQ.
iv. Any other task assigned from time to time.
The FBR further said that the following officers have been transferred / posted at FATF Cell with immediate effect and until further orders:
01. Syed Asad Raza Rizvi, Pakistan Customs Service (PCS) BS-20 has been transferred to Chief, FATF Cell, FBR Headquarters, Islamabad from the post of Director, Directorate of Intelligence and Investigation-FBR, Multan.
02. Muhammad Waqas Hanif, Inland Revenue IRS/BS-19 has been transferred and posted as Secretary, FATF Cell, FBR, HQ, Islamabad from the post of Additional Director, Directorate General of I&I, IR, Islamabad.
03. Muhammad Asif (PCS/BS-19) has been transferred and posted as Secretary, FATF Cell, FBR, HQ, Islamabad from the post of Additional Director, FATF Cell, Directorate General of Intelligence and Investigation, FBR, Islamabd.
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FBR detects huge gap in indirect revenue collection; launches sales tax, federal excise monitoring
ISLAMABAD: Federal Board of Revenue (FBR) has launched monitoring of sales tax and federal excise duty following huge gap detected in indirect revenue collection.
“There appear to be a big gap between actual collection of sales tax / federal excise and its true potential,” the FBR said in a communication sent to all Chief Commissioners of Inland Revenue.
The FBR said that in order to bridge the gap numerous amendments were made in Sales Tax Act, 1990 and Federal Excise Act, 2005 through Finance Act, 2019.
Now administrative measures are required to be strengthened / implement the policy corrections/
The FBR directed the field formations to adopt the following steps in addition to their regular actions:
01. Immediate action on non-files of July and August 2019, especially where the registered persons have filed their sales tax returns for the tax periods of May and June 2019. In addition, desk audit of the registered persons who filed returns for the month of July and August 2019 to be conducted especially those who were previously included in five reduced / zero rated sectors.
02. Monitoring of registered persons paying sales tax under Eighth Schedule of the Sales Tax Act, 1990 especially in those cases where registered persons are supplying at reduced rate.
03. Sectoral analysis/reports must be made by the field formations having jurisdiction over a specific sector, and these reports should be shared with the FBR as well as other field formations having jurisdiction over same sectors. Any success stories be identified.
04. The registered persons dealing in third schedule items should be specifically monitored to ensure the sales tax is being paid on the retail price.
05. Printing of retail price has to be ensured and price lists of all such products have to be obtained from the manufactured/importers filing in Third Schedule to compared with the printed prices of products supplied in market.
06. Monitoring of stock position as on June 30, 2019 filed by the manufacturers/importers of goods which have been included in Third Schedule to ensure that supply is made and tax is charged on retail price.
07. Timely filing of sales tax/federal excise returns along with all the annexure should be ensured. It has been observed that the registered persons do intentionally skip some annexures while filing the returns.
08. Analysis of Annexure J showing the sale, production and stock must be at regular basis.
09. Special focus should be made on those cases which have piled up massive carry forward and are only paying sales tax under Section 8B of the Sales Tax Act, 1990.
10. FBR instructions / SOP for revision of the Sales Tax Returns should be followed in letter and spirit.
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Late return filers may get ATL status after payment of surcharge
ISLAMABAD: Persons, who fail to file their income tax return by due date, may be included into the Active Taxpayers List (ATL) after payment of surcharge.
Inclusion in ATL is mandatory to avail reduced rate of withholding tax. Through Finance Act, 2019 the rates of withholding tax have been increased 100 percent for those persons who have either failed to file annual return or filed return after due date.
This means only those individuals or companies will get ATL status who filed their annual income tax returns by due date.
The FBR said that a person’s name will be part of the current ATL, if the Tax Return filed pertains to the Tax year of the relevant ATL.
For example, to be part of the ATL published on 1st March 2018, a person must have filed a Tax return for the Tax year 2017.
Similarly, to be a part of the ATL published on 1st March 2019, a person must have filed a Tax Return for the Tax year 2018.
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.
For example, to be part of the ATL published on 1st March 2019, a person must file a Tax Return by the specified due date for the Tax year 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.
Furthermore, a surcharge for placement on ATL after due date of filing of Tax Return will be charged as under:
Company Rs20,000
Association of Persons: Rs10,000
Individuals: Rs1,000
The FBR said a that company or an AOP shall be included in the ATL, whose return is not to be filed due to incorporation or formation after 30th day of June relevant to the Tax year pertaining to the ATL.
Joint account holders as an entity shall be deemed to be part of ATL if any of the persons in the joint account have met the criteria of being included in the ATL.
Bank account held in the name of a minor shall be considered part of ATL if the parents, guardians of the minor or any person who has deposited money in minor’s account are deemed to have met the criteria of being included in the ATL.
The FBR said that the late filers of Income Tax Return for Tax Year 2018 can pay “Surcharge for ATL” as defined under section 182(A) of Income Tax Ordinance 2001 by clicking on Tax Payment Nature “Misc” head in the PSID.
Only after the payment of surcharge will the name of the late filer become part of ATL.