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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’s tax collection gap widens by Rs295bn; needs Rs1,698bn in three months to meet target

    FBR’s tax collection gap widens by Rs295bn; needs Rs1,698bn in three months to meet target

    ISLAMABAD: The deficit in tax collection has soared by 295 billion in first nine month of current fiscal year making it an impossible task for Federal Board of Revenue (FBR) to achieve Rs4,398 billion target for current fiscal year.

    The revenue collection for July – March 2019 was stood at Rs2,700 billion as against the target of Rs2,995 billion.

    The widening of tax gap posed a serious trouble for the government in meeting development expenditures and curtailing fiscal deficit.

    The State Bank of Pakistan (SBP) has already projected the fiscal deficit at 6 to 7 percent as against actual target of 4.9 percent of the GDP for the fiscal year 2018/2019.

    According to provisional collection the FBR collected Rs358 billion. The collection target for the month of March was Rs432 billion.

    FBR sources said that the collection of advance tax witnessed steep fall due to shrinking profitability of the corporate sector.

    The corporate sector pay advance income tax in March on the assumption of their income in the three quarters.

    As per the latest development in the revenue collection the FBR will required Rs1,698 billion during next three months in order to achieve the revenue collection target of Rs4,398 billion.

  • Sales Tax Act 1990: 17 percent applicable on taxable supplies

    Sales Tax Act 1990: 17 percent applicable on taxable supplies

    KARACHI: A normal sales tax rate at 17 percent is applicable on taxable supplies made by registered person.


    Federal Board of Revenue (FBR) issued recently the updated Sales Tax Act, 1990 under which its Section 3 explained the scope of tax.


    Section 3: Scope of tax


    Sub-Section (1): Subject to the provisions of this Act, there shall be charged, levied and paid a tax known as sales tax at the rate of seventeen percent of the value of–


    (a) taxable supplies made by a registered person in the course or furtherance of any taxable activity carried on by him; and


    (b) goods imported into Pakistan, irrespective of their final destination in territories of Pakistan.


    Sub-Section (1A): Subject to the provision of sub section (6) of section 8 or any notification issued thereunder, where taxable supplies are made to a person who has not obtained registration number, there shall be charged, levied and paid a further tax at the rate of three percent of the value In addition to the rate specified in sub sections (1), (1B), (2), (5), (6) and section 4 provided that the Federal Govt. may, by notification in the official Gazette, specify the taxable supplies in respect of which the further tax shall not be charged, levied and paid.


    Sub-Section (1B): The Board may, by notification in the Official Gazette, in lieu of levying and collecting tax under sub section (1) on taxable supplies, levy and collect tax –


    (a) On the production capacity of plants, machinery, undertaking, establishments or installation producing on manufacturing such goods; or


    (b) On fixed basis, as it may deem fit, from any person who is in a position to collect such tax due to the nature of the business.


    Sub-Section (2): Notwithstanding the provisions of sub-section (1): –


    (a) taxable supplies specified in the Third Schedule shall be charged to tax at the rate of seventeen per cent of the retail price or in case such supplies are also specified in the Eighth Schedule, at the rates specified therein and the retail price thereof, along with the amount of sales tax shall be legibly, prominently and indelibly printed or embossed by the manufacturer on each article, packet, container, package, cover or label, as the case may be;
    Provided that the Federal Government, may, by notification in the official Gazette, exclude any taxable supply from the said Schedule or include any taxable supply therein;


    (aa) goods specified in the Eighth schedule shall be charged to tax at such rates and subject to such conditions and limitations as specified therein; and


    (b) the Federal Government may, subject to such conditions and restrictions as it may impose, by notification in the official Gazette, declare that in respect of any taxable goods, the tax shall be charged, collected and paid in such manner and at such higher or lower rate or rates as may be specified in the said notification.


    Sub-Section (3): The liability to pay the tax shall be,-


    (a) in the case of supply of goods, of the person making the supply, and


    (b) in the case of goods imported into Pakistan, of the person importing the goods.

  • FBR establishes directorate for taking action against undeclared offshore assets

    FBR establishes directorate for taking action against undeclared offshore assets

    ISLAMABAD: Federal Board of Revenue (FBR) has established Directorate General of International Tax Operations to initiate legal proceedings in undeclared offshore assets by Pakistanis.

    The FBR issued notification to set up the directorate on March 29, 2019. The directorate will have head office in Islamabad and its subordinate offices will be at Lahore, Peshawar, Multan, Karachi, Quetta.

    The directorate was introduced through Finance Supplementary (Second Amendment) Act, 2019 by inserting Section 230E to Income Tax Ordinance, 2001.

    The functions and powers of the directorate general of international tax operations would be:

    a. receive and send information from other jurisdictions under spontaneous, automatic and on demand exchange of information under exchange of information agreements.

    b. Levy and recover tax by passing an assessment order under section 123(1A) in case of undeclared offshore assets and incomes.

    c. Receive, transmit and exchange country by country reports of the jurisdictions that are parties to international agreements with Pakistan.

    d. Conduct transfer pricing audit in cases selected for such audit by the directorate genera of international tax operations.

  • FBR first time receives over 1.8 million income tax returns

    FBR first time receives over 1.8 million income tax returns

    ISLAMABAD: Federal Board of Revenue (FBR) has received over 1.8 million income tax returns for tax year 2018, a statement said on Sunday.

    “The FBR for the first time in its history has crossed the mark of 1,800,000 Income Tax Return filers for Tax year 2018,” it said.

    FBR is committed to broadening the Tax Base to truly make it a self-reliant country.

    FBR will continue with its efforts of creating awareness about the importance of paying taxes not only as a civic duty but also for the growth of the economy.

    The institution is devoted to facilitating the public in helping to not only fulfill their tax obligations but also to create an enabling environment that fosters economic growth.

    The institution is also geared to act against those found guilty of not fulfilling their tax obligations.

    FBR could not have achieved this landmark without the cooperation of our tax paying public.

    Together with your support we can truly make the dream of a vibrant Pakistan a distinct reality.

  • FBR extends annual return filing date up to April 30

    FBR extends annual return filing date up to April 30

    The Federal Board of Revenue (FBR) has announced an extension for the deadline to file income tax returns for the tax year 2018. In Income Tax Circular No. 03, issued on Sunday, the FBR has moved the deadline from March 31, 2019, to April 30, 2019. This marks the fourth extension granted for the filing of tax returns for the specified year.

    (more…)
  • Income tax return filing may be allowed for a day or two

    Income tax return filing may be allowed for a day or two

    KARACHI: The income tax return filing may continue for next one or two days as last two days were on non-working days.

    The FBR through Income Tax Circular No. 02 on March 15, 2019 extended the last date for filing annual returns for tax year 2018 up to March 31, 2019.

    However, the last date is falling on Sunday and FBR had not arranged facility for making payment through banks.

    Previously, the FBR planned to open the offices on March 29 and 30 to facilitate the taxpayers in making payment of duty and taxes.

    However, State Bank of Pakistan issued a circular for facilitating payment by banks and NIFT on March 30.

    According to tax experts the last date would be automatically moved to next date if the last date is falling on holiday under Section 10 of General Clauses Act, 1897.

    Therefore, people would be allowed to file income tax returns on the next date of date filing automatically, if FBR does not further extend the date.

    Previously, the last date of filing income tax returns was December 15, 2018, which was non-working day or weekend then the FBR allowed the return filing for another day.

    Following is the press release issued by the FBR on December 15, 2018:

    “Federal Board of Revenue (FBR) has allowed filing of Income Tax returns until 17th December 2018 because of the weekend falling on 15th December which was previously announced as the deadline for filing of returns.

    “The statement issued by the Official Spokesperson FBR says that a number of queries have been received about extension of last date of filing of return but the return filing date is not being extended any further.

    “However, since the last date of filing of return falls on a non-working day, hence as per General Clauses Act the closing date for filing of Income Tax returns falling on 15th December 2018 as per previous announcement is automatically extended to next working day i.e. Monday the 17th of December.

    “The tax offices will be extending help in filing of returns on Monday till close of office hours and the returns will be received electronically till 12 midnight.

    Moreover, the Commissioners are also authorized to grant extension for a period up to 15 days on case-to-case basis. Although the receipt of return will not be blocked after due date, yet as per existing law, the names of persons who fail to file return by the closing date (or by the date extended by the Commissioners) will not be put on the Active Taxpayers List.”

  • FBR issues guidelines for refund payment through bonds

    FBR issues guidelines for refund payment through bonds

    ISLAMABAD: In order to facilitate businesses / exporters whose refund claims are pending with Federal Board of Revenue (FBR) and they are facing liquidity problem, it has been decided to pay sales tax refunds through bonds to the claimants who express willing to get refund through bonds.

    Following are important guidelines in this respect:

    — The bond scheme pertains to sales tax refund only.

    — The features of bond are provided under section 67A of the Sales Tax Act, 1990, as inserted vide Finance Supplementary (Second Amendment) Act, 2019.

    — The bonds shall be issued to the claimants who express willingness for the same by giving an option at e.fbr.gov.pk using their login ID.

    — The maturity period of bonds is three years from the date of issuance.

    — The bonds carry a simple profit of 10% per annum payable at the end of maturity period i.e. against a bond of Rs. 100,000, Rs. 130,000 shall be paid after maturity to the holder of the bond.

    — The bonds are transferable i.e. if a refund claimant who has been issued the bond can sell the same to another person / bank at a price agreed between the two parties.

    — The bonds shall be acceptable by banks as collateral for getting advances / loans.

    — There shall be no deduction of zakat on the bonds. Sahib-e-Nisab may pay zakat voluntarily as per shariah.

    — The bonds shall be payable against Refund Payment Orders (RPOs) as issued in favour of the claimant.

    — The bonds shall be issued in multiples of Rs. 100,000. The amount of refund payable as in excess of multiple of Rs. 100,000 shall be paid in cash by direct transfer through State Bank of Pakistan in the claimant’s account.

    — The bonds shall be issued through Central Depository Company (CDC). The transfer / pledging of bonds shall be handled by CDC at the option of bond holder.

    — The claimant who opt for issuance of bond should have an account with Central Depository Company (CDC). They can provide this account number while submitting their option for bonds to FBR.

    — If a claimant does not have a CDC account, he still can opt for issuance of bonds. He will be guided regarding opening of CDC account.

    — In case the bond holder wants to sell / transfer the bond, the buyer / transferee should also have a CDC account.

    — At the end of maturity period, FBR shall pay the amount due under bond i.e. face value plus profit to the bond holder.

    — If FBR decides, it can pay the amount due under bond to the bond holder including profit before maturity. This option is available only to FBR.

    — The bond holder shall have to pay nominal fees to CDC on transfers / custody as provided in CDC schedule available at its website.


    Related Stories
    FBR sets up DGBTB for taking action against tax evaders

  • FBR sets up DGBTB for taking action against tax evaders

    FBR sets up DGBTB for taking action against tax evaders

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday established a new directorate for taking action against tax evaders.

    The FBR notified to create Directorate General of Broadening of Tax Base (DGBTB) to bring potential taxpayers into tax net.

    The new directorate, which was already made part of the statute, will work on the available data of persons and companies those were not into the tax net.

    The directorate will have powers to identify new taxpayers, issue notice and to initiate legal action.

    The FBR currently reportedly has huge data of persons having taxable income but not on the tax roll. In the existing set up the BTB action was taken as per routine matter.

    The new directorate will also have jurisdiction over benami cases and take action as per law.

    The FBR recently notified rules for benami laws which was approved by the National Assembly in January 2017. The FBR has transferred the cases of benami properties to BTB wing to initiate legal action against tax evaders.

  • Income Tax Ordinance 2001: Income from pension funds tax exempted

    Income Tax Ordinance 2001: Income from pension funds tax exempted

    KARACHI: The government has allowed tax exemption to the income derived by pensioners invested in various schemes, including pension funds.

    The Second Schedule of Income Tax Ordinance, 2001 allowed tax exemption to the income derived by pensioners.

    The following exemptions are available to the pensioners:

    Any payment from a provident fund to which the Provident Funds Act, 1925 applies.

    The accumulated balance due and becoming payable to an employee participating in a recognized provident fund.

    The accumulated balance up to 50 percent received from the voluntary pension system offered by a pension fund manager under the Voluntary Pension System Rules, 2005 at the time of eligible person’s-

    (a) retirement; or

    (b) disability rendering him unable to work.

    The amounts received as monthly installment from an income payment plan invested out of the accumulated balance of an individual pension accounts with a pension fund manager or an approved annuity plan or another individual pension account of eligible person or the survivors pension account maintained with any other pension fund manager as specified in the Voluntary Pension System Rules 2005 shall be exempt from tax provided accumulated balance is invested for a period of ten years:

    Provided that where any amount is exempted under this clause and subsequently it is discovered, on the basis of documents or otherwise, by the Commissioner that any of the conditions specified in this clause were not fulfilled, the exemption originally allowed shall be deemed to have been wrongly allowed and the Commissioner may, notwithstanding anything contained in this Ordinance, re-compute the tax payable by the taxpayer for the relevant years and the provisions of this Ordinance shall, so far as may be, apply accordingly.

    Any withdrawal of accumulated balance from approved pension fund that represent the transfer of balance of approved provident fund to the said approved pension fund under the Voluntary Pension System Rules , 2005.

    Any benevolent grant paid from the Benevolent Fund to the employees or members of their families in accordance with the provisions of the Central Employee Benevolent Fund and Group Insurance Act, 1969.

    Any payment from an approved superannuation fund made on the death of a beneficiary or in lieu of or in commutation of any annuity, or by way of refund of contribution on the death of a beneficiary.

    Any income of a person representing the sums received by him as a worker from out of the Workers Participation Fund established under the Companies Profits (Workers Participation) Act, 1968.

  • FBR temporarily halts raids on tax evaders

    FBR temporarily halts raids on tax evaders

    ISLAMABAD: Federal Board of Revenue (FBR) has temporarily halted raids on tax evaders on assurance of business community.

    The FBR has given an opportunity to non-compliant taxpayers to declare their income and assets by filing annual returns up to March 31.

    At a media briefing on Thursday, Member Inland Revenue (Poilcy) Doctor Hamid Ateeq Sarwar and Member Inland Revenue (Operations) said that the FBR stopped the recovery campaign for fifteen days.

    The members said that the raids have been suspended as a good gesture on the request of the business community.

    Chambers and trade bodies have assured their cooperation in recovery of due amount of taxes from business community.

    Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and other business community had raised the issue of raids by tax offices during recent visit of FBR chairman Mohammad Jehanzeb Khan to Karachi.

    Member IR Operations Seema Shakil confirmed the issuance of notice to former president Asif Ali Zardari. She said that relevant office in Karachi which is dealing the case.