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Get the latest FBR news, tax updates, income tax, sales tax, customs, notifications, and policies from the Federal Board of Revenue.

  • FBR suggested abolishing regulatory duty on import of phrma raw materials

    FBR suggested abolishing regulatory duty on import of phrma raw materials

    KARACHI: Federal Board of Revenue (FBR) has been suggested to abolish regulatory duty and reduce customs duty on import of raw materials by pharmaceutical industry.

    Overseas Investors Chamber of Commerce and Industry (OICCI) in its tax proposals for budget 2019/2020 said that through the Finance Act 2008, custom duty on pharmaceutical raw materials was reduced to five percent.

    However, there are still many items that are not included in the list of duty reduction.

    The OICCI recommended reduction in custom duty and abolishment of regulatory duty on pharma raw materials and packing materials.

    All pharmaceutical raw materials should be added to Table A of Part-II of Fifth Schedule to the Pakistan Customs Tariff, it further recommended.

    The OICCI pointed out another issued saying that as already highlighted in the Supreme Court Human Right Case No. 93336 of 2018, FBR to allow Sales Tax exemption for Goods defined in Medical Devices Rules – 2017 under DRAP Act, 2012 with their respective headings of Customs Act 1969 imported and locally manufactured.

    The OICCI recommended that a new Serial No.4A to be inserted in Part II of the First Schedule to reduce the rate of tax from 5.5 percent to 1 percent on import of pharmaceutical raw materials and finished goods for filers.

    It said that presently the rate of tax at import of pharma raw materials and finished goods is very high considering the price constraints on pharmaceutical products and significant devaluation of currency over past months.

    The pharma sector is highly dependent on import due to non-availability of raw materials and medicine in finished form in as local substitutes.

    The OICCI also suggested sales tax zero rating on pharmaceutical inputs. It said that sales tax being paid on packaging material utilities and other supplies used in manufacturing pharmaceutical products is adding to the product cost.

    Since the final product is exempt from Sales Tax, the tax paid can neither be passed on to the consumer nor can be claimed as input tax. This is also against the philosophy of sales tax which is supposed to be borne by the consumer.

    It recommended that local supply of medicines/drugs should be classified under Zero-rating, instead of the current “exempt” status from levy of sales tax, so that the pharma industry, whose selling prices are regulated by the government, may claim input tax credits on taxable inputs.

    “Alternatively, the taxable raw materials and packing materials, whether imported or locally procured may be notified as exempt from sales tax, if purchased by a pharma manufacturer.”

  • FBR advised to allow tax adjustment on telecom services

    FBR advised to allow tax adjustment on telecom services

    KARACHI: Federal Board of Revenue (FBR) has been urged to allow adjustment of withholding tax on services provided telecom sector.

    The Overseas Investors Chamber of Commerce and Industry (OICCI) in tax proposals for budget 2019/2020 recommended that the eight percent minimum tax regime should be withdrawn and should be made adjustable.

    The OICCI said that through Finance Act, 2016, an amendment was made in Section 153(1)(b) of the Income Tax Ordinance, 2001 whereby the 8 percent withholding tax deducted against the services provided by telecom companies, along with other service providers, have been subjected to a charge of minimum tax instead of adjustable regardless their actual income or loss.

    This tax has thus changed the character of income tax from a direct tax to an indirect tax as the amount of charge would no longer be applicable on the quantum of income actually earned even under the standard income tax rules.

    Furthermore, the exorbitant rate of 8 percent will seriously erode the profitability, or further increase the losses, of the telecommunication industry which according to independent reports is in shackles and is already the victim of discriminatory taxation.

    Consequent to the above amendment in the law, non-issuance of exemption certificates under Section 153(1)(b) on Income Tax Ordinance, 2001 of the Income Tax Ordinance, 2001 in view of the imposition of the minimum tax has also increased the administrative burden of both the telecommunication companies and the withholding tax monitoring units of FBR as the tax that was previously deposited lump-sum as advance tax is now being collected by thousands of corporate customers across Pakistan.

  • FBR increases sales tax on petrol

    FBR increases sales tax on petrol

    ISLAMABAD: Federal Board of Revenue (FBR) has increased sales tax rate on petrol to 13 percent for the month of June 2019 from 12 percent, which was applicable in May 2019.

    The FBR issued SRO 603(I)/2019 dated May 31, 2019 and revised the sales tax rates on petroleum products effective from June 01, 2019.

    The sales tax on petrol has been increased to 13 percent from 12 percent.

    The sales tax rate on high speed diesel has been reduced to 13 percent from 17 percent.

    However, sales tax rates on kerosene oil and light diesel oil were kept unchanged at 17 percent.

    The government increased the prices of POL products for the month of June 2019, which are as follow: Petrol 108.42 increased to Rs112.68; High Speed Diesel 122.32 increased to Rs126.82; Kerosene (SKO) Rs96.77 to Rs98.46; and Light Diesel Oil (LDO) Rs86.94 to Rs88.62.

  • FBR requested to extend date for filing sales tax return

    FBR requested to extend date for filing sales tax return

    KARACHI: Federal Board of Revenue (FBR) has been urged to extend the date for filing monthly sales tax returns as public holidays announced by the government for Eid holidays coincide with the return filing due dates.

    A letter has been sent on Friday to FBR Chairman Syed Muhammad Shabbar Zaidi for urgent consideration and for extension of time for e-filing of sales tax annexure ‘C’ and sales tax returns for the tax period May 2019.

    The Pakistan Tax Bar Association (PTBA) in its letter to FBR chairman informed that the last date for e-filing of sales tax annexure ‘C’ of sales tax returns and filing of sales tax return for the month May 2019 is June 10, 2019 and June 15, 2019, respectively. However, due to Eid Holidays due from June 04 to June 08, 2019, all the business houses will remain closed.

    The PTBA further said that the first word day after Eid and weekly holidays shall be June 10, 2019 which will be the last day of filing of Annexure “C”. Therefore it would not be practically possible to submit annexure “C” and Sales Tax Return in time.

    In view of above, the PTBA requested to extend the last date of e-filling of Sales Tax annexure “C” and e-filling of sales tax return up to June 18, 2019 for the tax period May 2019 to facilitate the taxpayers to fulfill their legal obligations properly.

  • PTBA urges FBR to extend date for filing income tax returns

    PTBA urges FBR to extend date for filing income tax returns

    KARACHI: Pakistan Tax Bar Association (PTBA) on Saturday urged Federal Board of Revenue (FBR) to extend the last date for filing income tax returns for Tax Year 2018 up to June 30, 2019 considering the recently launched tax amnesty scheme.

    In a letter to FBR Chairman Syed Muhammad Shabbar Zaidi, the PTBA informed that the Asset Declaration Ordinance, 2019 was announced on May 16, 2019 and the last date for filing declaration is June 30, 2019.

    The PTBA urged the FBR chairman to extend the last date for filing of return of income and statement of final taxation for individuals, Association of Persons (AOPs) and companies (other than public limited companies quoted on stock exchange) to June 30, 2019.

    The last date was already extended by the FBR till April 30, 2019 through Circular No. 03/2019 dated March 31, 2019.

    The apex tax bar said that the extension would encourage the new taxpayers to bring their house in order and come into the mainstream of economic activities by availing the benefit to become active taxpayers.

  • Banks assure providing details of Benami account holders to FBR

    Banks assure providing details of Benami account holders to FBR

    ISLAMABAD: The commercial banks have assured the Federal Board of Revenue (FBR) of providing details of Benami account holders for the purpose of broadening of tax base and documentation of economy.

    An important meeting was held on Thursday of all chief financial officers with Syed Muhammad Shabbar Zaidi, chairman, FBR.

    The CFOs of all commercial banks assured complete cooperation to the FBR chairman in providing details of account holders in order to broaden the tax base.

    The participants of commercial banks included Chief Financial Officers of Allied Bank, United Bank, Habib Bank and others.

    They assured their full cooperation to the Chairman FBR and welcomed his appointment as Chairman FBR.

    The Chairman FBR thanked the Chief Financial Officers.

    FBR sources said that the meeting was important related to next review of Financial Action Task Force (FATF) on Pakistan.

    It is learnt that huge amount of money laundering was done through Benami bank accounts besides those were also used for tax evasion.

    The FBR chairman has already made it clear that the current amnesty scheme is the last opportunity for people having undeclared income and assets.

  • ICAP proposes restricting powers of Directorate General Intelligence and Investigation

    ICAP proposes restricting powers of Directorate General Intelligence and Investigation

    KARACHI: Institute of Chartered Accountants of Pakistan (ICAP) has proposed restricting powers of Directorate General of Intelligence and Investigation (I&I) as multiple powers of tax authorities are causing hardship for taxpayers.

    The ICAP in its tax proposals for budget 2019/2020 said that the Federal Board of Revenue (FBR) through SRO 115 (I)/2015 dated February 09, 2015 conferred upon the Directorate General (Intelligence and Investigation), Inland Revenue, the powers of the Chief Commissioner/Commissioner:

    — to exercise powers and perform functions under Sections 174, 175, 176, 177 (other than power to initiate audit), 178, 179, 180, 181, 182, Part III, Part XI of Chapter X, Sections 205 and 221; and

    — to investigate Suspicious Transactions Reports (STRs) or other assets of persons or classes of persons impounded by any department or agency of the Federal or Provincial government and prepare/transmit reports to respective RTOs or LTUs for the purpose of application of Section 111 and for taking appropriate action under the Income Tax Ordinance, 2001.

    The ICAP recommended that the law should be amended so that the authority of Director General Intelligence and Investigation is exercised only to investigate Suspicious Transactions Reports (STRs) or other assets of persons or classes of persons impounded by any department or agency of the Federal or Provincial government and prepare / transmit reports to respective RTOs or LTUs for the purpose of application of Section 111 and for taking appropriate action under the Income Tax Ordinance, 2001 and should not exercise the powers under various sections of the Ordinance.

    The creation of parallel authorities for the purpose of sections 174, 175, 176, 177, 178, 179, 180, 181, 182, Part III, Part XI of Chapter X, Sections 205 and 221 is causing problems to the taxpayers.

  • Monitoring of Withholding Tax: FBR launches mega operation against textile, sugar companies for tax evasion

    Monitoring of Withholding Tax: FBR launches mega operation against textile, sugar companies for tax evasion

    ISLAMABAD: Federal Board of Revenue (FBR) has launched mega crackdown against textile and sugar sectors for suppressing sales and evading tax by issuing fake and flying invoices.

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  • IR offices directed to observed extended working hours to facilitate taxpayers

    IR offices directed to observed extended working hours to facilitate taxpayers

    The Federal Board of Revenue (FBR) has taken a proactive step to facilitate taxpayers by directing offices of Inland Revenue (IR) to observe extended working hours.

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  • FBR withdraws zero-rate facility to textile unit for no business activity at declared address

    FBR withdraws zero-rate facility to textile unit for no business activity at declared address

    KARACHI: Federal Board of Revenue (FBR) suspended zero-rated sales tax facility on supply of electricity and gas to a textile unit for not operational at declared place of business activity.

    The FBR issued Sales Tax General Order (STGO) No. 98 and 99 to withdraw the sales tax zero-rated facility on supply of electricity and gas to M/s. Teetex Industries because the unit was no more operational at the declared place.

    The FBR directed Chief Commissioner Inland Revenue, Corporate Regional Tax Office, Karachi to coordinate with K-Electric and SSGCL regarding implementation of the amendment in the general order and submit report in respect of action taken/ recovery made, if any, for misuse of the facility.

    The FBR also asked K-Electric and Sui Southern Gas Company Limited to start charging sales tax on the supply of electricity and gas to the taxpayers with immediate effect.