The Federal Board of Revenue (FBR) has taken a significant step in facilitating tax compliance by issuing income tax return forms specifically tailored for salaried individuals for the tax year 2022.
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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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Pakistan allows duty exemption on coal import from Afghanistan
ISLAMABAD: Pakistan has allowed exemption of customs duty on import of coal from Afghanistan.
The country’s apex revenue authority i.e. Federal Board of Revenue (FBR) issued SRO 968(I)/2022 to exempt customs duty on import of certain items, including coal from Afghanistan.
Earlier this week Prime Minister Muhammad Shehbaz Sharif approved the import of super-critical quality coal from Afghanistan in Pakistani rupee instead of dollars to help generate low-cost electricity in the country.
READ MORE: Govt. may exempt customs duty in emergency situation
The prime minister, chairing a meeting to improve the mechanism for transportation of Afghan coal, expressed concerns over the rising price of coal in the international market.
He said the rise in coal price was also one of the reasons behind the generation of expensive electricity by the coal power plants operating in the country.
He viewed that the import of Afghan coal in Pakistani currency would save the foreign exchange.
The prime minister was told that the import of Afghan coal – initially for Sahiwal and Hub power plants – would save around $2.2 billion annually.
READ MORE: Rate of customs duty in Pakistan on imports
The FBR allowed duty exemption on import of following goods: Description (Pakistan Customs Tariff)
Other Coal (2701.1900)
Bituminous coal (2701.1200)
Talc (2526.1010)
Marble (Crude or roughly trimmed) (2515.1100)
Plants & parts of plants (including seed & fruit) (1211.9000)
Seeds of cumin neither crushed nor grounded (0909.3100)
Sulphur of all kinds, other than sublimed sulphur (2503.0000)
Yams (Dioscorea spp.) (0714.3000)
Containers (including containers for the transport of fluids) (8609 0000)
The FBR said that the SRO would take effect from July 01, 2022.
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Pakistan opens return filing portal for tax year 2022
ISLAMABAD: Pakistan on Friday opened the income tax return filing portal for tax year 2022. The return filing portal will remained available till September 30, 2022, as three months are statutory time period for filing income tax return.
Salaried persons, business individuals, Association of Persons (AOPs) and Companies having special account year will file the income tax return during this period.
The Federal Board of Revenue (FBR) issued SRO 978(I)/2022 to notify finalized income tax return form for the tax year 2022.
Following are the categories of taxpayers who required to file income tax return for tax year 2022 under Income Tax Ordinance, 2001:
Section 14 of Income Tax Ordinance, 2001 has explained in detail about persons whom the annual return filing is mandatory. According to the Section:
READ MORE: Who needs to file Tax Year 2022 return in Pakistan?
114. Return of income. — (1) Subject to this Ordinance, the following persons are required to furnish a return of income for a tax year, namely:–
(a) every company;
(ab) every person (other than a company) whose taxable income for the year exceeds the maximum amount that is not chargeable to tax under this Ordinance for the year; or
(ac) any non-profit organization as defined in clause (36) of section 2;
(ae) every person whose income for the year is subject to final taxation under any provision of this Ordinance;
READ MORE: FBR issues draft return forms for tax year 2022
(b) any person not covered by clause (a), (ab), (ac) or (ad) who,—
(i) has been charged to tax in respect of any of the two preceding tax years;
(ii) claims a loss carried forward under this Ordinance for a tax year;
(iii) owns immovable property with a land area of five hundred square yards or more or owns any flat located in areas falling within the municipal limits existing immediately before the commencement of Local Government laws in the provinces; or areas in a Cantonment; or the Islamabad Capital Territory;
(iv) owns immoveable property with a land area of five hundred square yards or more located in a rating area;
(v) owns a flat having covered area of two thousand square feet or more located in a rating area;
(vi) owns a motor vehicle having engine capacity above 1000 CC;
READ MORE: Tax return filing starts from July 01, 2022
(vii) has obtained National Tax Number; or
(viii) is the holder of commercial or industrial connection of electricity where the amount of annual bill exceeds rupees five hundred thousand;
(ix) is a resident person registered with any chamber of commerce and industry or any trade or business association or any market committee or any professional body including Pakistan Engineering Council, Pakistan Medical and Dental Council, Pakistan Bar Council or any Provincial Bar Council, Institute of Chartered Accountants of Pakistan or Institute of Cost and Management Accountants of Pakistan; or
(x) is a resident person being an individual required to file foreign income and assets statement under section 116A.
(c) persons or classes of persons notified by the Board with the approval of the Minister in-charge.
(1A) Every individual whose income under the head ‘Income from business’ exceeds rupees three hundred thousand but does not exceed rupees four hundred thousand in a tax year is also required to furnish return of income from the tax year.
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LTO Karachi surpasses FY22 collection target
KARACHI: Large Taxpayers’ Office (LTO) Karachi surpasses the target of revenue collection of Rs.1,595 billion during the fiscal year 2021-2022.
The LTO, Karachi has collected Rs.146 billion excess amount, as it was assigned the target of Rs.1,449 billion for the fiscal year 2021-2022.
READ MORE: LTO Karachi collects Rs1.4 trillion July – May
The LTO Karachi has also surpassed the budgetary target fixed at Rs.170 billion during the month June 2022, by collecting a massive amount of Rs.196 billion in all taxes.
Large Taxpayers Office, Karachi has shown remarkable achievement by collecting Revenue at Rs.1,595 billion in all taxes during the period July 2021 – June 2022 as against Rs.1,124 billion collected previous year showing an overall growth of 42 percent vis-à-vis overall collection made during the same period last year.
READ MORE: LTO Karachi posts 41% collection growth in 10 months
Overall budget target assigned to LTO Karachi by the Federal Government for the period July 2021 to July 2022 was Rs.1,449 billion against which LTO Karachi has achieved Rs.1,595 billion which is Rs.146 billion in excess of the assigned target.
During the month of June 2022, Large Taxpayers Office, Karachi (Federal Board of Revenue) has also surpassed budgetary target fixed at Rs.170 billion by collecting gigantic Rs.196 billion (all taxes) against the target fixed by the Government.
READ MORE: LTO Karachi surpasses Rs1 trillion mark in 8MFY22
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FBR nears to achieve revenue collection target for 2021/2022
KARACHI: Pakistan’s apex tax agency has almost achieved the revenue collection target of Rs6.1 trillion for fiscal year 2021/2022.
According to FBR sources the revenue collection has crossed the ambitious mark of Rs6 trillion by midday of June 28, 2028. “The FBR needs another Rs100 billion to surpass the revised upward revenue collection target for the outgoing fiscal year,” a senior FBR official said.
READ MORE: All tax proposals of IT sector accepted: FBR
The actual revenue collection target for the FBR was Rs5.9 trillion. However, under the IMF program and excellent revenue collection performance throughout the year, the revenue collection target was revised upward to Rs6.1 trillion.
The sources said that the FBR is likely to surpass the collection target by today (June 28, 2022) evening as only Rs100 billion is left to achieve the target.
READ MORE: Pakistan’s salaried class unhappy over new tax changes
The FBR has further two days i.e. June 29 and June 30 to finish the fiscal year 2021/2022.
According to the Rs6 trillion breakup of revenue collection made available, the FBR collected Rs2.21 billion as income tax; Rs2.77 trillion as sales tax; Rs320 billion as federal excise duty; Rs1.01 trillion as customs duty.
READ MORE: Pakistan reduces salary tax slabs to 7 in budget 2022/23
The gross collection of the FBR till Midday of June 28m 2022 comes at Rs6.305 trillion. The revenue body granted an amount of Rs305 billion as refunds that makes the net revenue collection at Rs6 trillion.
The sources said that the FBR has achieved around 98.3 per cent of the target so far. The comparative numbers with the last fiscal year, the revenue collection targets in income tax, sales tax, federal excise duty and customs duty has been achieved as 98 per cent, 98 per cent, 95 per cent and 102 per cent, respectively.
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All tax proposals of IT sector accepted: FBR
ISLAMABAD: The Federal Board of Revenue (FBR) has said all pressing demands of IT sector have been accepted in the budget 2022/2023.
In a statement issued on Monday, the FBR has taken an exception to a statement issued by Pakistan Software Houses Association (P@SHA) dated June 25, 2022.
It has reported some facts regarding the exemptions/tax incentives / facilitation given to the IT and IT enabled export services through the Federal Budget 2022, tabled in the National Assembly on June 10, 2022.
READ MORE: Pakistan’s salaried class unhappy over new tax changes
Clarifying its position, FBR has stated that in the wake of the Budget, some important meetings were held with the representatives of IT sector through Pakistan Software Export Board (PSEB) and also with Federal Minister for IT, Syed Amin-Ul-Haque, and his team. During these meetings, almost all the key demands of the IT Sector were thoroughly deliberated and largely agreed.
FBR has further clarified that the amended Finance Bill will incorporate some tangible measures to facilitate the exporters of IT and IT enabled services. Almost all the pressing demands of the IT Sector have been accepted. The same have been announced in the speech by the Federal Finance Minister on 24th June, 2022 on the floor of the National Assembly.
These include the following six key concessions:
READ MORE: Pakistan reduces salary tax slabs to 7 in budget 2022/23
i) The sector has been provided a reduced tax rate of 0.25% on their export proceeds which is a quarter of the 1% export tax rate provided to all other exporters of goods.
ii) The sector has been removed from tax credit regime to simplify the tax filing system and to remove hassles of compliance that were earlier required to make them eligible for 100% tax credit to claim tax exemption.
iii) The requirements of filing of Withholding Tax Statements and Sales Tax return have been liberalized for the sector and only those who are required under the law will file WHT Statements or the Sales Tax Returns. For individuals having turnover up to Rs. 100 m per year there is no requirement to file WHT Statement or to deduct tax.
READ MORE: Pakistan reduces salary tax slabs to 7 in budget 2022/23
iv) The definition of IT and IT enabled services as provided under the Income Tax Ordinance, 2001 has been liberalized by expanding its scope by making suitable amendments and all inclusive, and “not limited to” definition has been provided.
v) IT and IT enabled services exporters have been provided the facility of obtaining Sales Tax refund in respect of any Sales Tax that has been paid as their input on computers, laptops, stationary other items etc. This facility is not available under the Provincial Sales Tax Law.
vi) The demand of the IT Sector of reviving tax exemption for Venture Capital Fund has been accepted and a new provision has been created for providing Income Tax Exemption to the Venture Capital Fund for three years.
READ MORE: Massive cut in subsidies to curtail current expenditures
It is pertinent to mention that the above exemptions and tax facilitations to boost exports of IT and IT enabled services were agreed and discussed in the meetings with the Federal Minister for IT, Syed Amin-Ul-Haque, and the representatives of the PSEB. It appears that the above statement given by P@SHA is on account of lack of information about the outcome of the decisions taken by the Honorable Finance Minister in that meeting and announced accordingly.
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Committee recommends lifting import ban on luxury items
A high-level committee of Pakistan’s leading businessmen, tasked with reviewing budget anomalies, has formally recommended lifting the ban on the import of luxury items.
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Pakistan tax offices to work extended hours for revenue collection
ISLAMABAD: Pakistan tax offices have been directed to work extended hours on the last two days of the current fiscal year i.e. June 29, 2022 and June 30, 2022 for collection of duty and taxes.
The Federal Board of Revenue (FBR) on Friday directed that all Large Tax Offices (LTOs), Medium Tax Office (MTO), Corporate Tax Offices (CTOs) and Regional Tax offices (RTOs) would remain open and observe extended working hours till 10:00 PM on Wednesday, June 29, 2022 and till 12:00 AM on Thursday, June 30, 2022, to facilitate the taxpayers in payment of duties and taxes.
READ MORE: Pakistan slaps super tax on industries, individuals
Chief Commissioners Inland Revenue have been asked to establish liaison with State Bank of Pakistan (SBP) and authorized branches of National Bank of Pakistan (NBP) to ensure transfer of tax collected by these branches to the respective branches of SBP on the same date to account for the same towards collection for the month of June, 2022 as per SBPs’ letter dated June 23, 2022.
The SBP in its letter stated that pursuant to FBR’s request for opening of banks’ branches for extended hours on 29th and 30th June 2022, and same day settlement of tax collections, following instructions, regarding observance of banking hours on 29th and 30th June 2022, are issued for compliance to facilitate the taxpayers:
READ MORE: Key tax measures taken through Finance Bill 2022
The SBP-BSC offices and NBP branches (A, B and C category) shall observe extended banking hours till 8:00 PM and 12:00 AM on 29th and 30th June 2022, respectively for collection of government taxes and duties through manual mode as well as ADC’s Over-the-Counter (OTC) facility.
In order to ensure same day settlement of tax collections on 30th June 2022 following special clearing and settlement will be arranged through M/s. NIFT and 1Link:-
READ MORE: FPCCI identifies tax anomalies in budget 2022-2023
M/s NIFT shall arrange special clearing at 12:00 AM on 30th June 2022 for same day clearing of payment instruments. M/s NIFT shall submit final returns to SBP-BSC offices for settlement by 10:00 AM on July 01, 2022.
M/s 1Link shall arrange to provide the settlement batch of transactions executed through ADCs platform till 12:00 AM on 30th June 2022 by 09:00 AM on July 01, 2022 to the SBP for settlement in government accounts.
READ MORE: Pakistan announces massive tax reduction for salaried persons
NBP branches shall settle their transactions of 30th June 2022 with respective SBP-BSC field offices / head office latest by 12:00 PM next day i.e. July 01, 2022.
Further, in order to eliminate the issue of spillover of tax receipts. NBP shall ensure that no instrument concerning government receipts, lodged in aforesaid office hours, shall remain unattended at any NBP branch and shall be settled in the value date of 30th June 2022 through special clearing.
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Who needs to file Tax Year 2022 return in Pakistan?
KARACHI: Income Tax Ordinance, 2021 has explained the category of persons who are required to file income tax return for tax year 2022.
The Federal Board of Revenue (FBR) is set to issue finalized income tax return forms to start the filing process from July 01, 2022.
In this regard the FBR has already issued draft return forms and invited comments from stakeholders.
READ MORE: FBR issues draft return forms for tax year 2022
Section 14 of Income Tax Ordinance, 2001 has explained in detail about persons whom the annual return filing is mandatory. According to the Section:
114. Return of income. — (1) Subject to this Ordinance, the following persons are required to furnish a return of income for a tax year, namely:–
(a) every company;
(ab) every person (other than a company) whose taxable income for the year exceeds the maximum amount that is not chargeable to tax under this Ordinance for the year; or
READ MORE: Tax return filing starts from July 01, 2022
(ac) any non-profit organization as defined in clause (36) of section 2;
(ae) every person whose income for the year is subject to final taxation under any provision of this Ordinance;
(b) any person not covered by clause 2[(a), (ab), (ac) or (ad) who,—
(i) has been charged to tax in respect of any of the two preceding tax years;
(ii) claims a loss carried forward under this Ordinance for a tax year;
(iii) owns immovable property with a land area of five hundred square yards or more or owns any flat located in areas falling within the municipal limits existing immediately before the commencement of Local Government laws in the provinces; or areas in a Cantonment; or the Islamabad Capital Territory;
(iv) owns immoveable property with a land area of five hundred square yards or more located in a rating area;
READ MORE: Penalty amount revised for late filing income tax returns
(v) owns a flat having covered area of two thousand square feet or more located in a rating area;
(vi) owns a motor vehicle having engine capacity above 1000 CC;
(vii) has obtained National Tax Number; or
(viii) is the holder of commercial or industrial connection of electricity where the amount of annual bill exceeds rupees five hundred thousand;
(ix) is a resident person registered with any chamber of commerce and industry or any trade or business association or any market committee or any professional body including Pakistan Engineering Council, Pakistan Medical and Dental Council, Pakistan Bar Council or any Provincial Bar Council, Institute of Chartered Accountants of Pakistan or Institute of Cost and Management Accountants of Pakistan; or
(x) is a resident person being an individual required to file foreign income and assets statement under section 116A.
READ MORE: FBR to disable mobile SIMs on non-filing of tax returns
(c) persons or classes of persons notified by the Board with the approval of the Minister in-charge.
(1A) Every individual whose income under the head ‘Income from business’ exceeds rupees three hundred thousand but does not exceed rupees four hundred thousand] in a tax year is also required to furnish return of income from the tax year.
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Procedure notified for TAD under Afghan transit trade
ISLAMABAD: The Federal Board of Revenue (FBR) has notified procedure for issuance of temporary admission document (TAD) under Afghan Transit Trade.
The FBR issued SRO 802(I)/2022 to amend Customs Rules, 2001 by inserting new rule 482A.
In March 2022, Pakistan and Afghanistan implemented movement of transit and bilateral trade through TAD for commercial vehicles.
Under the arrangement, the Pakistan Embassy in Kabul and the consulate generals in Jalalabad and Kandahar will issue TAD for Afghan vehicles. The Afghan Embassy in Islamabad and consulate generals in Peshawar and Quetta will issue the entry documents for Pakistani vehicles.
The move, aimed at improving regional connectivity with the Central Asian States, envisages the provision of TAD to transporters from both sides.
“482A. Procedure for issuance of TAD.- Notwithstanding the provisions of rule 482, initially the following procedure and conditions shall be followed for issuance and regulation of TAD, namely:-
(1) Directorate of Transit Trade, Karachi and Afghanistan Ministry of Transport shall share list of approved transport operators and their vehicles before starting issuance of TAD. When new transport operators and their vehicles are added to the list, the other side shall be informed via email, immediately. Both sides shall nominate focal persons for timely exchange of this information. Proper and complete record of all approved transport operators and their vehicles shall be maintained by the both sides;
(2) The list of approved Afghan transport operators and their registered vehicles shall be forwarded by Directorate of Transit Trade, Karachi to the concerned officers in the Embassy of Pakistan, Kabul and the Consulate General of Pakistan at Kandahar and Jalalabad and the list of approved Pakistani transport operators and their registered vehicles shall be forwarded by Afghan authorities to the concerned officers in the Embassy of Afghanistan in Islamabad or the Consulate General of Afghanistan in Karachi, Quetta and Peshawar.
(3) the application of TAD by Afghan approved transport operators for Afghanistan registered vehicles, as per Appendix-IIIA, along with required documents, shall be collected on all working days at window No. 5 of Pakistan Embassy in Kabul and Pakistan Consulate in Kandahar during 1100 to 1200 hours. Whereas applications for TAD for Pakistan registered vehicles as per Appendix-IIIB shall be collected on all working days at Afghan Embassy in Islamabad, and Afghan Consulate General in Karachi, Quetta and Peshawar during 1000 to 1100 hours;
(4) no fee shall be charged application form. Both availability and shall also or consulate websites downloadable;
(5) Trade Officer or Commercial Assistant posted at commercial section in Pakistan Embassy, Kabul and at the Pakistan Consulate General in Kandahar shall issue the TAD for vehicles registered in Afghanistan. The Transport Attaché, Afghan Embassy at Islamabad, and Afghan Consulate General in Karachi, Quetta and Peshawar Pakistan shall issue the TAD for vehicles registered in Pakistan. The format of TAD is enclosed as Appendix IIIC.
(6) at the time of issuance of TAD, by Pakistani authorities, to approved transport operators of Afghanistan for an Afghan registered vehicle, the particulars of the vehicle shall be cross-verified with the details sent by the Directorate General of Transit Trade, Karachi;
(7) TAD shall be issued against payment of fee of US $ 100. The TAD fee collected by Pakistan Embassy or Consulates in Afghanistan shall be transferred to the account of Directorate General of Transit Trade on monthly basis. A bar code having all the details of the vehicles may be embossed on TAD;
(8) TAD shall be issued within five working days of receipt of applications;
(9) validity of TAD shall be 180 days (06 months) from the date of issue with the option of multiple entries with the maximum one time stay of 30 days in Pakistan and Afghanistan;
(10) statement of TADs issued by Pak Embassy and Consulates shall be finished to the designated focal person of Directorate of Transit Trade, Karachi on daily basis via email and Afghan side will develop same system on their side;
(11) TAD shall be valid for one vehicle at a time and only for the carrier to whom it was issued; it shall not be transferable to other carriers;
(12) any unauthorized entry or tampering in TAD shall render it void and invalid.
(13) Pakistan customs shall be entering each entry or exit journey on the back page of TAD; the same shall be done by Ministry of Transport and Civil Aviation Afghanistan;
(14) security and safety of the TAD in the home country shall be the responsibility of the transport operator. If the TAD is lost in the home county, the transport operator in whose name the TAD is issued shall first register an FIR and then apply for a new TAD by providing a copy of the FIR. The embassies or consulates shall inform the relevant authorities, to cancel that TAD in their record;
(15) security and safety of the TAD in the territory of the other contracting party shall be the responsibility of the driver of the vehicle. If the TAD is lost, the driver shall first register an FIR in the nearest Police station and shall inform the transport or customs authorities. For exit on the crossing points he shall provide the documentary proof of his lawful entry and copy of FIR lodged with the police. The embassies or consulates shall inform the relevant authorities, to cancel that TAD in their record;
(16) if the vehicle goes missing in the territory of Pakistan, the driver will immediately report the incident to the nearest police station and register the FIR. He shall submit the copy of FIR in the office of the nearest Customs Enforcement Collectorate. The transport operator in such cases will be liable to pay duties and taxes leviable on the goods as ascertained by Pakistan Customs. Similar procedure will be adopted by the other contracting party in their territory.
(17) the TAD will be valid for both bilateral and transit trade at following BCPs:-
(a) Torkham (transit and bilateral trade)
(b)
(c) Chaman (transit and bilateral trade)
(d) Ghulam Khan (transit and bilateral trade)
(e) Kharlachi (bilateral trade)
(f) Angoor Adda (bilateral trade)
The cabotage is not allowed. Any violation of this rule will result in black listing of the vehicle and cancellation of TAD.
(18) the respective Directorate of Transit Trade shall act as focal formation for TAD for transportation of transit as well as bilateral goods.
(19) The following documents shall be filed by the applicant transport operator for obtaining TAD:
(a) application form as per format given in Appendix IIIA and Appendix IIIB;
(b) expired TAD of the Vehicle (in original) this shall be required after 180 days of operationalization;
(c) copy of National ID Card or passport of the owner;
(d) copy of registration book of the vehicle;
(e) copy of license or authorization issued by Afghanistan Ministry of Transport to transport operators of Afghanistan for international carriage of goods or copy of license or authorization issued by Pak customs to transport operators of Pakistan for international carriage of goods;
(f) a valid fitness certificate shall be required for Afghan vehicles after every 180 days;
(g) picture of the vehicle for record purpose; and
(h) serially numbered authority letter issued by the
relevant transport operator.
(21) the contracting parties shall, in accordance with their respective laws, rules and regulations, grant multiple entry visa to the driver and one helper of the vehicle valid for a period of one year, each stay not exceeding 30 days. In exceptional circumstances the Ministries of Interior of the two countries will consider the request for extension of VISA after fulfilment of legal requirement.
482B. The arrangement prescribed through rule 482A is a temporary arrangement which will prevail till formalities under Afghanistan-Pakistan Transit Trade Agreement, 2022 are finalized and would cease to have effect from the date FBR notifies.