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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.

  • FBR set asides penalty on four customs officials

    FBR set asides penalty on four customs officials

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday set-aside penalty imposed on four officials of Customs collectorate Quetta with future warning.

    The FBR Member Admin as appellate authority accepted the appeal of four customs officials of BS-16 including Muhammad Arif Dostani, Muhammad Arif, Ghulam Hussain Khoso, Saleem Akhtar, and set aside the minor penalty imposed on the officials.

    The chief management on June 19, 2017 imposed penalty on those four officials of ‘withholding of four increments without cumulative effect.’

  • Salary tax card – updated for Tax Year 2019

    Salary tax card – updated for Tax Year 2019

    KARACHI: Federal Board of Revenue (FBR) has updated tax rate for salary persons as per Finance Supplementary (Second Amendment) Act, 2019.

    The tax card is updated up to March 09, 2019.

    The FBR said that persons responsible for paying salary are required to collect tax from employees under Section 149 of Income Tax Ordinance, 2001 at the time salary is actually paid.

    Every person responsible for paying Salary to an employee shall deduct tax from the amount paid:

    1. Where the taxable income does not exceed Rs, 400,000: Zero percent

    2. Where the taxable income exceeds Rs, 400,000 but does not exceed Rs, 800,000: Rs1,000

    3. Where the taxable income exceeds Rs, 800,000 but does not exceed Rs, 1,200,000: Rs2,000

    4. Where the taxable income exceeds Rs, 1,200,000 but does not exceed Rs, 2,500,000: 5 percent of the amount exceeding Rs, 1,200,000.

    5. Where the taxable income exceeds Rs, 2,500,000 but does not exceed Rs, 4,000,000: Rs, 65,000/- + 15 percent of the amount exceeding Rs. 2,500,000.

    6. Where the taxable income exceeds Rs, 4,000,000 but does not exceed Rs, 8,000,000: Rs. 290,000/- + 20 percent of the amount exceeding Rs. 4,000,000.

    7. Where the taxable income exceeds Rs, 8,000,000: Rs. 1,090,000/- + 25 percent of the amount exceeding Rs. 4,800,000.

    Provided that where the taxable income exceeds Rs. 800,000/- the minimum tax payable shall be Rs.2,000/-

  • Sales Tax Act 1990: imposition of default surcharge in fraud, non-payment

    Sales Tax Act 1990: imposition of default surcharge in fraud, non-payment

    KARACHI: A person willfully does not make sales tax payment or commits fraud shall liable to pay default surcharge along with actual amount.

    According to updated Sales Tax Act, 1990 issued by the Federal Board of Revenue (FBR) the default surcharge has been explained through Section 34.

    Section 34: Default Surcharge

    Sub-Section (1): Notwithstanding the provisions of section 11, if a registered person does not pay the tax due or any part thereof, whether willfully or otherwise, in time or in the manner specified under this Act, rules or notifications issued thereunder or claims a tax credit, refund or makes an adjustment which is not admissible to him, or incorrectly applies the rate of zero per cent to supplies made by him, he shall, in addition to the tax due, pay default surcharge at the rate mentioned below:—

    (a) the person liable to pay any amount of tax or charge or the amount of refund erroneously made, shall pay default surcharge at the rate of twelve percent per annum, of the amount of tax due or the amount of refund erroneously made; and

    (b) deleted

    (c) in case, the default is on account of tax fraud, the person who has committed tax fraud shall pay default surcharge at the rate of two per cent per month, of the amount of tax evaded or the amount of refund fraudulently claimed, till such time the entire liability including the amount of default surcharge is paid.

    Sub-Section (2): For the purpose of calculation of default surcharge, –

    (a) in the case of inadmissible input tax credit or refund, the period of default shall be reckoned from the date of adjustment of such credit or, as the case may be, refund is received; and

    (b) in the case of non-payment of tax or part thereof, the period of default shall be reckoned from the 16th day of a month (following the due date of the tax period to which the default relates) to the day preceding the date on which the tax due is actually paid.

    Explanation: For the purpose of this section tax due does not include the amount of penalty.

  • FBR issues rules for ADR in sales tax, federal excise cases

    FBR issues rules for ADR in sales tax, federal excise cases

    ISLAMABAD: Federal Board of Revenue (FBR) on Thursday notified rules to make Alternate Dispute Resolution Committee (ADRC) functional for cases in sales tax and federal excise.

    The FBR issued SROs 488 and 489 (I)/2019 to notify the rules. The ADRC is required to decide a case within 120 days and the decision will have binding effect on both taxpayers and tax officials.

    Under the rules any person interested for resolution of any dispute shall make a written application for alternative dispute resolution to the FBR.

    The FBR, after examination of contents of the application and facts stated therein and on satisfaction that the application may be referred to a Committee for the resolution of the hardship or dispute, shall appoint and notify a Committee, within a period of sixty days from receipt of the application.

    A retired judge not below the rank of District and Sessions Judge, appointed in a manner as aforesaid, shall be Chairperson of the Committee.

    After notification of the Committee, the applicant or the Commissioner or both, as the case may be, shall withdraw appeal pending before any court of law or an appellate authority relating to the hardship or dispute stated in the application.

    The Committee shall commence proceedings after receipt of order of withdrawal of appeal from the FBR.

    The chairperson of the Committee shall be responsible for deciding the procedure to be followed by the Committee which may, inter-alia, include the following, namely:-

    (a) to decide about the place of sitting of the Committee, in consultation with the Chief Commissioner having jurisdiction over the applicant;

    (b) to specify date and time for conducting proceedings by the Committee;

    (c) to supervise the proceedings of the Committee;

    (d) to issue notices by courier or registered post or electronic mail to the applicant;

    (e) to requisition and produce relevant records or witnesses from the Commissioner or other concerned quarters;

    (f) to ensure attendance of the applicant for hearing either in person or through an advocate, representative or a tax consultant;

    (g) to consolidate decision of the Committee and communicate it to the Board, the Commissioner and the applicant; and

    (h) for any other matter covered under these rules.

    The Committee may conduct inquiry, seek expert opinion, direct any officer of Inland Revenue or any other person to conduct an audit and make recommendations to the Committee in respect of dispute or hardship.

    The Committee may determine the issue and may thereafter seek further information or data or expert opinion or make or cause to be made such inquiries or audit as it may deem fit, to decide the matter.

    The Committee shall decide the dispute within one hundred and twenty days from the date of receipt of order of withdrawal from the FBR.

    Decision of majority members of the Committee shall be construed decision of the Committee which shall be communicated by the Committee to the FBR, the Commissioner having jurisdiction and the applicant.

    The decision of the Committee shall be binding on the Commissioner and the aggrieved person.

    On receipt of the Committee’s decision, the applicant shall make payment of sales tax and other taxes as specified by the Committee in its decision and the Commissioner shall modify order as per decision of the Committee.

  • Yarn merchants urge FBR to stop harassment over turnover tax

    Yarn merchants urge FBR to stop harassment over turnover tax

    KARACHI: The Pakistan Yarn Merchants Association (PYMA) has urgently called on the Federal Board of Revenue (FBR) to issue a clear clarification regarding the applicable turnover income tax rate for yarn merchants, following what it describes as unjustified harassment by tax authorities.

    (more…)
  • Tax amnesty scheme to be introduced in three phases, to continue by December 2019

    Tax amnesty scheme to be introduced in three phases, to continue by December 2019

    ISLAMABAD: Federal Board of Revenue (FBR) has recommended three phases for new tax amnesty scheme for undeclared assets.

    The FBR recommended three phases for the amnesty scheme for period ended June 30, 2019, September 30, 2019 and December 31, 2019. The rate of tax for undeclared assets (other than domestic real estate/undisclosed income has been recommended at five percent, 10 percent and 20 percent for first, second and third phase, respectively,

    The amnesty scheme has been proposed to cover real estate sector at one percent, two percent and four percent for three phases at fair market value (not less than value prescribed by the FBR under section 68 of Income Tax Ordinance, 2001), as declared by the declarant.

    Dr. Abdul Hafeez Shaikh, Adviser to Prime Minister on Finance, Revenue and Economic Affairs recently directed the FBR to review the proposed amnesty scheme and submit a new draft.

    According to the draft the amnesty scheme would be launched through promulgation of presidential ordinance.

    According to the draft the undisclosed sales shall be chargeable to tax at the rate of three percent (3 percent) of such sales in lieu of sales tax and federal excise duty.

    It is proposed that any foreign asset declared under this Ordinance shall be required to be repatriated to Pakistan or invested in Pakistan Banao Certificate before filing of declaration in the manner prescribed by the State Bank of Pakistan. This condition shall not be applicable on such foreign asset which represents foreign real estate.

  • Withholding tax rates on imports updated through Finance Supplementary (Second Amendment) Act 2019

    Withholding tax rates on imports updated through Finance Supplementary (Second Amendment) Act 2019

    KARACHI: Federal Board of Revenue (FBR) issued withholding tax rates on imports for tax year 2019 updated as per Finance Supplementary (Second Amendment) Act, 2019.

    The withholding tax rates updated up to March 09, 2019 on import under Section 148 of Income Tax Ordinance, 2001 as follow:

    The collector of customs shall collect withholding tax from every import of goods on the value of goods at the rate of one percent from filers of the import value increased by customs – duty, sales tax and federal excise duty and at 1.5 percent from non-filers of the import value as increased by customs-duty, sales tax and federal excise duty on the value of goods, included:

    1 (i) Industrial undertaking importing remeltable steel (PCT Heading 72.04) and directly reduced iron for its own use;

    (ii) Persons importing potassic of Economic Coordination Committee of the Cabinet’s decision No. ECC-155/12/2004 dated the 9th December, 2004

    (iii) Persons importing Urea;

    (iv) Manufactures covered under Notification No. S.R.O 1125(I)/2011 dated the 31st December, 2011 and importing items covered under S.R.O 1125(I)/2011 dated 31st December, 2011.

    (v) Persons importing Gold; and

    (vi) Persons importing Cotton

    (vii) Persons importing LNG

    — Industrial undertaking importing Plastic raw material (PCT Heading 39.01 to 39.12) for its own use.

    Filer: 1.75 percent of the import value as increased by Custom-duty, sales tax and federal excise duty

    2. Persons Importing Pulses

    Filer: 2 percent of the import value as increased by Custom-duty, sales tax and federal excise duty

    Non-filer: 3 percent of the import value as increased by custom-duty, sales tax and federal excise duty.

    3. Commercial importers covered under Notification No. S.R.O 1125(I)/2011 dated the 31st December, 2011 and importing items covered under S.R.O 1125(I)/2011 dated the 31st December, 2011

    Filer: 3 percent of the import value as increased by custom-duty sales tax and federal excise duty.

    Non-filer: 4.5 percent of the import value as increased by custom-duty , sales tax and federal excise duty

    Commercial Importer importing Plastic raw material (PCT Heading 39.01 to 39.12) for its own use

    Filer: 4.5 percent of the import value as increased by Custom-duty, sales tax and federal excise duty

    3A. Persons importing coal

    Filer: 4 percent

    Non-filer:6 percent

    4. Ship breakers on import of ship

    Filer: 4.5 percent

    Non-filer: 6.5 percent

    5. Industrial undertakings not covered under S.No 1 to 4

    Filer: 5.5 percent

    Non-filer: 8 percent

    6. Companies not covered under S. Nos 1 to 5

    Filer: 5.5 percent

    Non-filer: 8 percent

    7. Persons not covered Under S.Nos 1 to 6

    Filer: 6 percent

    Non-filer: 9 percent

    New proviso introduced through Finance Supplementary (Second Amendment) Act, 2019

    On Import of Mobile Phones by any Person (individual, AOP, Company) :

    C&F Value of Mobile Phone (in USD ($) ) Tax (in Rs)

    1. Up to $30: Rs70

    2.Exceeding $30 & up to $100: Rs. 730

    3.Exceeding $100 & up to $200: Rs. 930

    4.Exceeding $200 & up to $350: Rs. 970

    5.Exceeding $350 & up to $500: Rs. 3,000

    6.Exceeding $500: Rs. 5,200

    The tax shall be final for all other than those excluded under S. 148(7)&(8)

    The tax shall be adjustable for a tax year under S. 148(7) in respect of :-

    a. Raw material, plant, equipment & parts by an industrial undertaking for its own use;

    b. motor vehicle in CBU condition by manufacturer of motor vehicle.

    c. Large import houses as defined / explained in 148(7)(d)

    d. A foreign produced film imported for the purposes of screening and viewing.

  • Sales Tax Act 1990: One year jail for unauthorized access to FBR computerized system

    Sales Tax Act 1990: One year jail for unauthorized access to FBR computerized system

    KARACHI: Any persons attempted to gain unauthorized access to computerized system of Federal Board of Revenue (FBR) is liable to penalty and imprisonment up to one year.

    According to updated Sales Tax Act, 1990 issued by the FBR, the person trying to get unlawful access to computerized system would face harsh action.

    The law explained:

    Any person who,-

    (a) knowingly and without lawful authority gains access to or attempts to gain access to the computerized system; or

    (b) unauthorizedly uses or discloses or publishes or otherwise disseminates information obtained from the computerized system; or

    (c) falsifies any record or information stored in the computerized system; or

    (d) knowingly or dishonestly damages or impairs the computerized system; or

    (e) knowingly or dishonestly damages or impairs any duplicate tape or disc or other medium on which any information obtained from the computerized system is kept or stored; or

    (f) unauthorizedly uses unique user identifier of any other registered user to authenticate a transmission of information to the computerized system; or

    (g) fails to comply with or contravenes any of the conditions prescribed for security of unique user identifier.

    “Such person shall pay a penalty of twenty-five thousand rupees or one hundred per cent of the amount of tax involved, whichever is higher.”

    “He shall, further be liable, upon conviction by the Special Judge, to imprisonment for a term which may extend to one year, or with fine which may extend to an amount equal to the loss of tax involved, or with both.”

  • FBR asked not to send notices for turnover tax

    FBR asked not to send notices for turnover tax

    KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has urged Federal Board of Revenue (FBR) to issue necessary instructions to all RTOs to refrain from sending notices for demanding the unjust annual turnover Tax to members of Pakistan Yarn Merchants Association (PYMA) till the issue is resolved as the Annual Turnover Tax, which was 0.1 percent, was inadvertently being charged at 1.0 percent.

    In a letter sent to Member (Inland Revenue-Policy) FBR, Dr. Hamid Ateeq Sarwar on Wednesday, President KCCI Junaid Esmail Makda referred to a meeting between KCCI delegation and FBR authorities held recently at FBR House in Islamabad in which this particular issue was also thoroughly discussed with Member IR-Policy and other officials who assured to resolve the same in due course but no correction has been done so far in SRO333 (1)/2011.

    While reiterating that Inland Revenue-Policy department and RTOs should not issue further notices, he said that PYMA members have been receiving notices for Annual Turnover Tax which have to be suspended till the FBR makes necessary amendment.

  • Withholding tax rate on telephone cards

    Withholding tax rate on telephone cards

    KARACHI: The decision of Supreme Court of Pakistan has paved way for Federal Board of Revenue (FBR) to collect withholding tax on telephone usages under Section 236 of Income Tax Ordinance, 2001.

    The apex court on Wednesday restored taxes on pay cards to use mobile phone services. The court suspended the levy of taxes on phones in June 2018.

    Following are the applicable withholding tax rates on phone usages updated after Finance Supplementary (Second Amendment) Act, 2019:

    a. Telephone subscribers and internet will pay zero tax on monthly bill up to Rs1,000.

    However, Telephone subscribers and internet will pay 10 percent withholding tax on monthly bill up exceeding Rs1,000.

    b. In the case of subscriber of internet, mobile telephone and prepaid internet or telephone card, the FBR will collect 12.50 percent of the amount of bill or sales price of internet pre-paid card of pre-paid telephone card or sale of unit through any electronic medium or what ever form.

    The tax will be collected by person preparing telephone / Internet bill or issuing / selling prepared card for mobile phones / Internet from:

    — Telephone Subscribers, Internet subscriber, purchaser of Internet Prepaid Cards,

    — Telephone subscriber and purchaser of prepaid telephone cards

    Along with payment of telephone bill or at the time of issuance of or sales of prepared cards.