Karachi, March 14, 2022 – The Chairman of the Federal Board of Revenue (FBR), Dr. Muhammad Ashfaq Ahmed, emphasized the need for a shift in the approach to withholding tax (WHT), suggesting that it should be levied on income rather than transactions. He made these remarks during an address at the Karachi Chamber of Commerce and Industry (KCCI) on Monday.
(more…)Tag: Federal Board of Revenue
The Federal Board of Revenue is Pakistan’s apex tax agency, overseeing tax collection and policies. Pakistan Revenue is committed to providing timely updates on the Federal Board of Revenue to its readers.
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Adjustment restrictions hamper return filing by retailers
Retailers falling under Tier-1 have informed the Federal Board of Revenue (FBR) that they were unable to file monthly sales tax returns due to denial of adjustment by IRIS portal.
A number of retailers jointly sent a letter to FBR chairman apprising about unfavorable behavior of IRIS Portal by denying adjustment against credit notes issued by Tier-1 retailers.
READ MORE: FBR announces winners of third POS invoice draw
The retailers drew attention of the FBR chairman towards Section 9 of the Sales Tax Act, 1990 read with Rule 20 of the Sales Tax Rules, 2006, tax invoice issued by a registered person can be amended/modified/cancelled through issuance of credit note as a result of cancellation of supply of return of goods or a change in the nature of supply or change in the value of the supply.
They highlighted that sales made by Tier-1 retailers, as defined in clause 43A of Section 2 of the Sales Tax Act, 1990, to the end consumers are integrated with the FBR computerized system for real time reporting of sales in line with the Rules.
READ MORE: FBR identifies 1,421 retailers for tax integration
The FBR chairman has been informed that in case of sales return, credit note (sales return invoice) is issued by Tier-1 retailers in accordance with the relevant provisions of the Sales Tax Act, 1990. “IRIS portal of the FBR is also accepting this position and accepting credit notes issued by Tier-1 retailers, however, surprisingly, sales tax adjustment, relating to credit notes, which have been allowed in one month are being added back in sales tax liability of the next month in the IRIS based sales tax return.”
The retailers said: “… this practice of the sales tax return portal is strictly against the law.”
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They said that if such illegal restrictions are imposed on Tier-1 retailers, who have invested huge amounts in hardware as well as software for integration of sales tax reporting with the FBR, how would it be possible for the FBR to attract other retailers to get themselves registered with the FBR. “Instead of appreciating the efforts of Tier-1 retailers, they are being denied their legal and legitimate right of sales tax adjustment on credit notes.”
Due to serious flaw in the online sales tax return filing portal, a majority of Tier-1 retailers are still unable to file sales tax return for the month of January 2022 onward.
The FBR chairman has been urged to direct concerned authorities to resolve the issue at the earliest to enable Tier-1 retailers to submit their sales tax return.
READ MORE: POS invoice verification for prize scheme surges by 63%
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UAE favorite hiding for Pakistan assets: Dr. Ashfaq
Dr. Muhammad Ashfaq Ahmed, the Chairman of the Federal Board of Revenue (FBR), has drawn attention to the United Arab Emirates (UAE) as a preferred destination for parking offshore undisclosed funds by Pakistan nationals.
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FBR explains cash discount under sales tax laws
ISLAMABAD: The Federal Board of Revenue (FBR) has explained cash discount related to invoices issued through Point of Sale (POS) by Tier-1 retailers.
The FBR explained through an official note dated March 17, 2022 that cash discount has been allowed in the form of reduction of prices in seasonal sales / sales and the consideration in money is received after cash discount has been allowed.
It is clarified that the value of supply for sales tax purpose is the actual value received in monetary terms excluding the amount of sales tax and not the gross value. “Hence, the sales tax will be calculated and charged on the actual or discounted price accordingly,” the FBR added.
The FBR previously issued clarification in this regard through the official order dated October 13, 2021 on the standardized format of the sales tax invoice notified through SRO 1006(I)/2021 dated August 09, 2021.
The revenue body said that representations from the taxpayers and bar councils were received seeking further clarification of the ‘trade discount’.
It said that value of supply as per section 2 (46) of the Sales Tax Act, 1990 in respect of taxable supply means the consideration in money which the supplier receives from the recipient for that supply but excluding the amount of tax.
In the previous explanation dated October 13, 2021, the FBR clarified that the discount if any to be given by a retailer has to be depicted on the invoice horizontally i.e. from left to right.
READ MORE: Trade discount should be displayed on invoice: FBR
“The captions such as total, sales tax, discount allowed appearing at the bottom of the invoice are standalone notations and do not necessarily add or subtract one another.”
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FBR amends fresh property valuations for Islamabad
ISLAMABAD: The Federal Board of Revenue (FBR) on Tuesday made changes to property valuation tables for the capital city.
The FBR issued SRO 428(I)/2022 dated March 15, 2022 to a make amendment in the SRO 342(I)/2022 dated March 02, 2022.
Through the latest SRO the FBR withdrew the property valuation tables for DHA Phase 1 – 5 and DHA Valley for both residential and commercial plots.
READ MORE: FBR re-notifies valuation of immovable properties
The following entries in the valuation tables have been deleted for residential immovable properties:
62 DHA Phase 1 Any size 30,000 63 DHA Phase 2 Any size 35,000 64 DHA Phase 2 Extn Any size 8,264 65 DHA Phase 3 Any size 16,529 66 DHA Phase 4 Any size 9,917 67 DHA Phase 5 Any size 19,835 68 DHA Valley Any size 8,264 Similarly, following entries in the valuation tables have been deleted for commercial immovable properties:
171 DHA Phase 1 Commercial plot 23,900 172 DHA Phase 2 Commercial plot 22,200 173 DHA Phase 2 Extn Commercial plot 9,183 174 DHA Phase 3 Commercial plot 9,183 175 DHA Phase 4 Commercial plot 9,183 176 DHA Phase 5 Commercial plot 18,365 177 DHA Valley Commercial plot 2,755 The FBR on December 01, 2021 issued fresh and updated valuation tables for around 40 major cities of the country. However, the FBR deferred the implementation of the new valuations of immovable properties till January 15, 2022 and further deferred till January 31, 2022. The FBR once again deferred the implementation on the valuation table till February 28, 2022.
The revised tables of valuation of immovable properties have been issued and implemented on March 02, 2022.
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FBR announces winners of third POS invoice draw
ISLAMABAD: The Federal Board of Revenue (FBR) on Tuesday announced winners of third balloting of invoices issued through Point of Sale (POS) of retailers.
According to the FBR, the bumper prize of Rs1,000,000 has been awarded to Nasreen Akhtar on the invoice issued by Save Mart.
READ MORE: FBR announces prize winners in second POS invoice balloting
The FBR announced winners of two second prizes of Rs500,000 each to Muhammad Sajid Aslam on the invoice issued by New Haji Super Store and Raheel Shahbaz on the invoice issued by Rahat Bakers.
Similarly, the four winners of third prize amounting Rs250,000 each are Muhammad Shahid ur Rehman, Shahbaz Ahmad, Gul Niaz Bibi and Furqan.
The FBR conduct computerized balloting of invoices issued by Tier-1 retailers on every 15th day of a month. This was third draw as it was started in January 15, 2022.
The FBR encouraged people to actively participate in the balloting to win prizes after buying from POS integrated retailers.
READ MORE: FBR announces winners of first POS prize draw
The FBR previously issued a procedure for participating in the prize scheme.
The revenue body said that the customers of the integrated tier-1 retailers, whose names and CNICs are notified through random computerized draw shall be entitled to prizes in respect of their purchases from the integrated tier-1 retailers.
The customers shall verify the electronically generated invoice of integrated retailers either through the “tax asaan” application or by sending SMS to number 9966.
READ MORE: Prize scheme on invoices issued by retailers
The application shall notify the customer regarding the status of the invoice either as “verified” or “unverified”.
In case of a verified invoice, the customer shall furnish one time, the following detail to the online system, namely:- Name; CNIC; and Mobile number.
Names and CNICs of the customers shall be included in the random computerized draw upon fulfillment of the requirement.
In case of an unverified invoice, the customer shall report the same through the system. The Board shall conduct inquiry and take appropriate action under the relevant provisions of law.
READ MORE: FBR launches prize scheme for POS customers
The computerized draw for the prizes shall be held in the first week of every month at the FBR Headquarters and the invoices of the immediately preceding month shall be entered in the draw.
Draw winners shall be required to perform biometric verification, at the nearest e-sahulat facility of NADRA and submit a scanned copy on the “tax assan” application. After successful biometric verification, winners shall be required to provide their IBAN through a “tax asaan” application.
The total prize money and the denomination of the prizes shall be decided on month to month basis by the Board.
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Asem Iftikhar posted as DG Digital Invoicing, Analysts
ISLAMABAD: The Federal Board of Revenue (FBR) on Friday transferred Asem Iftikhar, a BS-20 officer of Inland Revenue Service (IRS) to the post of Director General, Directorate General of Digital Invoicing and Analysis.
The FBR notified transfers and postings of Inland Revenue officers in BS-18 to BS-20 with immediate effect and until further orders.
READ MORE: FBR transfers IRS officers BS-17 to BS-20
Following IRS officers have been transferred:
01. Asem Iftikhar (Inland Revenue Service/BS-20) has been transferred and posted as Director General (OPS), Directorate General of Digital Invoicing and Analysis, Islamabad from the post of Chief, (Admin Pool) Federal Board of Revenue (Hq), Islamabad.
02. Hassan Zulfiqar (Inland Revenue Service/BS-20) has been transferred and posted as Chief, (Legal-III) Legal-IR Wing Federal Board of Revenue (Hq), Islamabad from the post of Chief, (Legal-II) Legal-IR Wing Federal Board of Revenue (Hq), Islamabad.
READ MORE: FBR notifies transfer, posting of BS-19 IRS officers
03. Asif Haider Orakzai (Inland Revenue Service/BS-19) has been transferred and posted as Chief, (OPS) (WHT) Directorate General of Withholding Taxes Federal Board of Revenue (Hq), Islamabad from the post of Chief, (OPS) (Legal-III) Legal-IR Wing Federal Board of Revenue (Hq), Islamabad.
04. Faisal Asghar (Inland Revenue Service/BS-19) has been transferred and posted as Commissioner-IR (OPS), Inland Revenue (Appeals-I), Faisalabad from the post of Additional Commissioner, Corporate Tax Office, Lahore.
READ MORE: FBR transfers Sardar Khwaja as Member Audit
05. Ms. Saima Munawar (Inland Revenue Service/BS-18) has been transferred and posted as Additional Commissioner Inland Revenue, (OPS) Regional Tax Office, Lahore from the post of Additional Director, (OPS) Addl. Directorate of Internal Audit (Inland Revenue), Quetta.
06. Ms. Sadeea Nadeem (Inland Revenue Service/BS-18) has been transferred and posted as Additional Director, (OPS) Addl. Directorate of Internal Audit (Inland Revenue), Multan from the post of Additional Commissioner, (OPS) Regional Tax Office, Multan.
The FBR said the officers who are drawing performance allowance prior to issuance of this notification shall continue to draw this allowance on the new place of posting.
READ MORE: FBR transfers BS-20 IRS officers in major reshuffle
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Tax collection from property purchase climbs up 24%
ISLAMABAD: The collection of advance tax from purchase of immovable properties climbed up by 24 per cent during first half of the current fiscal year.
According to official data released by Federal Board of Revenue (FBR), the collection of advance tax on purchase / transfer of immovable property increased to Rs27.7 billion during first half (July – December) of fiscal year 2021/2022 as compared with Rs22.36 billion in the corresponding half of the last fiscal year.
READ MORE: FBR registration made mandatory for housing projects
The FBR collects advance income tax on purchase or transfer of immovable property under Section 236K of the Income Tax Ordinance, 2001. Under this Section any person responsible for registering, recording or attesting transfer of any immovable property shall at the time of registering, recording or attesting the transfer shall collect advance tax from purchaser or transferee at the rate of one per cent of the fair market value.
READ MORE: Advance tax on purchase of immovable property
The collection of withholding tax from income from property also recorded an increase of 12 per cent during the first half of the current fiscal year.
The FBR collected withholding tax amounting Rs14.90 billion on income from property during first half (July – December) of 2021/2022 as compared with Rs13.32 billion in the corresponding half of the last fiscal year.
The authorities collect withholding tax on income from property under Section 155 of the Income Tax Ordinance, 2001.
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Customs officer awarded ‘major penalty’ for corruption
ISLAMABAD: The Federal Board of Revenue (FBR) has imposed major penalty of ‘dismissal from service’ upon an officer of Pakistan Customs on the charges of corruption, misconduct and inefficiency.
The FBR in an office order issued on Tuesday stated that disciplinary proceedings were initiated against Mansab Shah, Inspector (BS-16) posted in Collectorate of Customs (Enforcement), Lahore in September 2020 on account of ‘Inefficiency, Misconduct & Corruption’.
READ MORE: Customs officer awarded ‘dismissal from service’
Muteen Alam, Additional Collector (PCS/BS-19), Collectorate of Customs (Enforcement), Lahore was appointed as Inquiry Officer to conduct inquiry into the case on account of acts of omission and commission as detailed in the Charge Sheet / Statement of Allegations.
The Inquiry Officer submitted the inquiry report, according to which the charges of “Inefficiency, Misconduct & Corruption” were established against the accused officer.
Accordingly, the Collector, Collectorate of Customs (Enforcement), Lahore / Authorized Officer served Show Cause Notice dated February 15, 2021 upon the accused.
READ MORE: Customs I&I impounds smuggled fabric in Islamabad
Upon receipt of reply to the Show Cause Notice, the accused was granted personal hearings on February 24, 2021 and March 24, 2021 to show cause in his defence.
The authorized officer, after considering the inquiry report, reply to Show Cause Notice and oral submissions made during the personal hearings, found the accused officer guilty of “Inefficiency, Misconduct & Corruption” and recommended to the Authority i.e. Member (Administration/Human Resource), FBR to impose major penalty of “Reduction to the lower post of Data Entry Operator” upon the accused officer as prescribed under Rule-4(1)(b)(iv) of the Government Servants (Efficiency & Discipline) Rules, 1973.
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The Member (Admn/HR)/Authority afforded an opportunity of personal hearing to the accused to defend the case in person on June 21, 2021. However, the accused failed to appear for hearing on the scheduled date and time and Final Show Cause Notice dated August 13, 2021 was served upon the accused by the Member (Admn/HR)/ Authority and he submitted written reply to the Show Cause Notice dated August 25, 2021.
The Member (Admn/HR) / Authority after going through the facts and record of the case, and having considered all aspects of the case submitted before him, did not agree with the recommendations of the Authorized Officer/ Collector regarding imposition of major penalty of “Reduction to lower post of Data Entry Operator” upon the accused and acting in the capacity as Authority, in exercise of powers conferred under Rule 5(1)(iv) of Government Servants (E&D) Rules, 1973 has imposed major penalty of “Dismissal from Service” upon Mansab Shah, Inspector (BS-16), Collectorate of Customs Enforcement, Lahore under Rule-4(1)(b)(iv) of the Government Servants (Efficiency & Discipline) Rules, 1973.
READ MORE: Peshawar Customs seizes narcotics worth Rs80 million
The accused shall have the right of appeal as admissible under the Civil Servants (Appeal) Rules, 1977.
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FBR, PTA introduce temporary registration of cell phones
ISLAMABAD: Federal Board of Revenue (FBR) and Pakistan Telecommunication Authority (PTA) have jointly introduced a temporary registration of cell phones to facilitate overseas Pakistanis.
To address the repeated concerns raised by Overseas Pakistanis (including those working abroad or Pakistani students studying overseas) and foreign nationals visiting Pakistan on short term visits regarding blocking of their mobile devices via DIRBS, FBR and PTA have jointly developed a new system for their temporary registration in collaboration with Federal Investigation Agency (FIA) and Mobile Phone Operators, a statement said on Tuesday.
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This module has been introduced for those overseas Pakistanis and foreign nationals who do not intend to keep their mobile device in Pakistan and will be applicable for only one (1) mobile handset device.
To avail this facility, the applicant shall provide his/her credentials including passport No., date of arrival and intended date of departure, mobile SIM issued in his/her name, and IMEI(s) of the device.
READ MORE: Ufone 4G ranked top voice and data network
The new system shall carry out real time validation from FIA IBMS to verify the date of arrival of the applicant. On lapse of 120 days of the stay of the applicant, the IMEI(s) utilized under this facilitation shall be suspended and swill not be utilized on local network services. In case, same applicant visits Pakistan again, he/she will be required to re-apply for this temporary facilitation, by re-entering the credentials which were used for the 1st or previous registration under this scheme.
This system will not only facilitate overseas Pakistanis and foreign nationals coming to Pakistan on short term basis but will also create a positive image of the country. Likewise, the checks introduced under this system will ensure that only the genuine overseas Pakistani/foreign national avails the said facility.
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It is pertinent to mention that FBR has already introduced a number of innovative digital interventions to ensure taxpayers facilitation and ease of doing business through technology. In the recent past, the country’s premier revenue collection organisation has collaborated with FIA and NADRA in developing an automated facility for Currency Declaration at ports to fight the menace of money laundering and thereby rule out the possible flight of foreign currency from Pakistan.
Therefore, the above initiative comes as yet another wonderful step taken by FBR to maximize taxpayers facilitation, in particular, the Overseas Pakistanis and Foreign Nationals visiting Pakistan for a short period of time.
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