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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.

  • Banks to share business account details to FBR

    Banks to share business account details to FBR

    KARACHI: It has been made mandatory for banks to provide details of business accounts every month to the Federal Board of Revenue (FBR), official sources said on Wednesday.

    This is the additional information to be submitted by the banks along with details already mandatory for the financial institutions.

    READ MORE: Digital payments defined through Finance Supplementary Act 2022

    To make the requirement mandatory, Section 165A of the Income Tax Ordinance, 2001 has amended through Finance (Supplementary) Act, 2022.

    A new clause (f) has been inserted to the Section 165A under which the banks shall provide a list of persons containing particulars of their business accounts opened or re-designated during each preceding calendar month.

    READ MORE: Digital tax monitoring yields Rs32.43bn from sugar sector

    The Section 165A of the Income Tax Ordinance, 2001 deals with furnishing of information by banks:

    “(1) Notwithstanding anything contained in any law for the time being in force including but not limited to the Banking Companies Ordinance, 1962 (LVII of 1962), the Protection of Economic Reforms Act, 1992 (XII of 1992), the Foreign Exchange Regulation Act, 1947 (VII of 1947) and the regulations made under the State Bank of Pakistan Act, 1956 (XXXIII of 1956), if any, on the subject every banking company shall make arrangements to provide to the Board in the prescribed form and manner,—

    READ MORE: Finance (Supplementary) Bill gets presidential approval

    (a) a list of persons containing particulars of cash withdrawals exceeding fifty thousand Rupees in a day and tax deductions thereon, aggregating to Rupees one million or more during each preceding calendar month;

    (b) a list containing particulars of deposits aggregating rupees ten million or more made during the preceding calendar month;

    (c) a list of payments made by any person against bills raised in respect of a credit card issued to that person, aggregating to rupees two hundred thousand or more during the preceding calendar month;

    (d) a list of persons receiving profit on debt and tax deductions thereon during preceding financial year.

    (e) omitted

    (2) Each banking company shall also make arrangements to nominate a senior officer at the head office to coordinate with the Board for provision of any information and documents in addition to those listed in sub-section (1), as may be required by the Board.

    (3) The banking companies and their officers shall not be liable to any civil, criminal or disciplinary proceedings against them for furnishing information required under this Ordinance.

    READ MORE: Supplementary bill aimed at documenting economy: Tarin

    (4) Subject to section 216, all information received under this section shall be used only for tax purposes and kept confidential.

    Tax experts at PwC A. F. Ferguson & Co. said that the change is in-line with the requirement for declaration of the business bank account under the provisions of section 114A introduced through the Finance Act, 2021 and is a step towards documentation of the economy.

  • Debt, credit card machines must for POS retailers: FBR

    Debt, credit card machines must for POS retailers: FBR

    ISLAMABAD: The Federal Board of Revenue (FBR) on Wednesday said retailers, who integrated Point of Sale (POS), must have facility of debt and credit card machines to facilitate their customers in making payments.

    The FBR issued Circular No. 05 of 2022 regarding implementation of Rule 150ZEB(II) of the Sales Tax Rules, 2006.

    READ MORE: Who are Tier-1 retailers under Sales Tax Act?

    The revenue body said that all Tier-1 retailers are expected to maintain the highest standards of documentation, reporting and transparency.

    In their endeavors to achieve such high standards, they are integrated with FBR’s IT system for real-time reporting of their economic transactions.

    READ MORE: FBR issues list of 608 Tier-1 non-compliant retailers

    It has transpired that many integrated Tier-1 retailers are indulged in making cash transactions, which is not only against the overall scheme of things, but also the intended objectives.

    In this connection, it is pertinent to note that Rule 150ZEB(II) of the Sales Tax Rules, 2006, mandates that each Tier-1 Retailer “must have the facility of debit and credit card machines installed at each notified outlet and the sales through debit or credit cards shall not be ordinarily refused.”

    READ MORE: Tier-1 retailers given deadline for integration

    “Accordingly, all integratable Tier-1 Retailers are liable to have debt/credit card machine installed at their outlets and IRS field formations to ensure implementation the rules in this respect,” the FBR added.

  • FBR asked to facilitate startups, e-commerce

    FBR asked to facilitate startups, e-commerce

    ISLAMABAD: Federal Board of Revenue (FBR) has been asked to facilitate startups and e-commerce across border exporters in the country.

    Special Assistant to the Prime Minister (SAPM) on E-Commerce, Senator Aon Abbas Buppi on Tuesday issued the directives at a meeting with FBR Chairman Dr. Muhammad Ashfaq.

    The SAPM also stated that startups is a growing economy and this segment needs all the facilitation by the government to promote digital economy and promoting e- Commerce, said a press release issued here.

    READ MORE: FBR slashes sales tax rates on petrol, HSD

    Aon Abbas Buppi specifically asked to abolish minimum turnover taxes for new startups to provide a conducive business environment for them.

    SAPM discussed with the FBR chairman to offer facilitation for startups and e-Commerce cross border exporters, Chairman FBR agreed to work on proposals from SAPM and assured that FBR will work along with the Ministry of commerce to create a conducive environment for the e-commerce ecosystem.

    Meanwhile Special Assistant to the Prime Minister (SAPM) on E-Commerce said the government has built the first e-commerce university in the country and is pursuing a revolutionary program to provide skilled labor in the sector.

    READ MORE: FBR to re-notify property values on February 01

    The e-commerce university will start its work by March 2022, which will provide affordable and quality education to the students. The country needs standard e-commerce university time.

    He said that the government of Pakistan Tehreek-e-Insaf (PTI) has introduced the first e-commerce policy in October 2019, which would create new avenues of employment opportunities for the youth of the country.

    Aon Abbas said that E-Commerce policy provides communities with a guideline on how they can take advantage of this innovative opportunity.

    He said the country currently has more than 50 percent youth population for whom there would be huge job opportunities in the e-commerce sector.

    READ MORE: FBR extends date for filing sales tax return

    SAPM said that Prime Minister Imran Khan has given us a target to open 10 million new jobs through the e-commerce sector.

    He said that 10,000 new companies have to be opened and 10,000 new people have to be trained to create more manpower in this sector.

    He said that at present the global market for e-commerce is $30 trillion, of which Pakistan’s share is very small.

    It has $4 trillion in Business to Business and $4 trillion in Business to Companies trade.

    READ MORE: Cash transactions above Rs50,000 not admissible

  • FBR slashes sales tax rates on petrol, HSD

    FBR slashes sales tax rates on petrol, HSD

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday slashed sales tax rates on petrol and high speed diesel (HSD) in order to reduce the impact of high oil prices at consumer end.

    The FBR issued SRO 88(I)/2022 dated January 18, 2022 to notify changes the sales tax rates on supply of petroleum products.

    The sales tax on supply of petrol has been reduced to 2.5 per cent ad valorem from 4.77 per cent. Similarly, the rate of sales tax on supply of high speed diesel has been reduced to 5.44 per cent from 9.08 per cent.

    The FBR kept unchanged the sales tax rates on kerosene and light diesel oil at 8.30 per cent and 2.70 per cent, respectively.

    The revenue body previously issued SRO 01(I)/2022 dated January 3, 2022 to change the rate of sales tax on petroleum products.

    Earlier on January 15, 2022, the government announced to increase prices of all petroleum products for next fortnight.

    READ MORE: Pakistan’s petrol price rises to record high at Rs147.83

    According to the notification, the price of petrol has been increased by Rs3.01 to Rs147.83 per liter from Rs144.82.

    The price of high speed diesel (HSD) has been increased by Rs3 to rs144.62 per liter from Rs141.62.

    The rate of kerosene has been enhanced by Rs3 to Rs116.48 per liter from Rs113.48.

    The price of light diesel oil has been increased by Rs 3.33 toRs114.54 per liter from Rs111.21.

    According to a notification issued by the Finance Division on January 15, 2022, the decision to enhance domestic prices of petroleum products because the international oil price had registered 6.2 per cent during the last week. Presently, at the highest level since last year.

    READ MORE: Prices of all POL products increased to wish New Year

    The existing sales tax rate and petroleum levy on various petroleum products are much below the budgeted targets.

    The finance ministry said that against the recommendations of Oil and Gas Regulatory Authority (OGRA) for increase of Rs5.52 per liter in petrol and Rs6.19/liter in high speed diesel prices, the Prime Minister had directed to absorb at the international prices through further cut in sales tax from last fortnight.

    “The finance ministry will take Rs2.6 billion revenue hit due to reduced sales tax rates,” it added.

    Therefore, the government has decided to make partial increase in the prices of the petroleum products in order to provide relief to the end consumers.

  • FBR to re-notify property values on February 01

    FBR to re-notify property values on February 01

    ISLAMABAD: The Federal Board of Revenue (FBR) on Tuesday said it will re-notify the valuation of immovable properties on February 01, 2022. The FBR further said that the valuation issued on December 01, 2021 will remain in abeyance till January 31, 2022.

    (more…)
  • Digital payments defined through Finance Supplementary Act 2022

    Digital payments defined through Finance Supplementary Act 2022

    In an effort to provide clarity and streamline the taxation of digital payments, recent amendments have been made to the Income Tax Ordinance, 2001, through the Finance (Supplementary) Act, 2022.

    (more…)
  • KTBA highlights anomalies in single sales tax return

    KTBA highlights anomalies in single sales tax return

    KARACHI: Karachi Tax Bar Association (KTBA) has highlighted anomalies in single sales tax return form, which was to be filed for the month of December 2021 in January 2022.

    “The sales tax return form has been uploaded on the IRIS portal pre-maturely without removing bugs and without proper testing,” the KTBA said in a letter sent to the chairman of Federal Board of Revenue (FBR) on Monday.

    READ MORE: FBR extends date for filing sales tax return

    Such exercises do not only agitate the taxpayers but they also damage the image of the FBR, it added.

    KTBA president Zeeshan Merchant in the letter to the FBR chairman, hoped that the tax authorities would resolve the issues at the earliest and in the meantime would allow reasonable time to the taxpayers to file sales tax return harmoniously.

    He suggested the FBR to allow filing of sales tax return on e-FBR until the issues are resolved, synchronized and anomalies are effectively removed.

    READ MORE: FBR launches sales tax return filing through single portal

    As part of automation in tax services vis-à-vis to ensure facilitation /ease of doing business to the taxpayers, the FBR launched single sales tax return for goods and services on IRIS Portal through Office Memo dated December 24, 2021 and has made it operational from the Tax Period December 2021 and onwards.

    The tax bar while appreciating the efforts of the FBR stated that it is equally important to follow the legal norms and comprehend and resolve the practical intricacies in the episode passionately.

    READ MORE: KTBA passes resolution against FTO Asif Jah

    About the legality of the filing sales tax return, Merchant noted that the procedure to prescribe and file monthly Sales Tax Return under the Sales Tax Act, 1990 (Act), are sourced via Rule 14 and SRO 555(I)/2006 dated June 05, 2006 which has been amended from time to time; where a monthly Sales Tax Return (for goods) under Form STR-7 is prescribed and is intact as of today. Seemingly, the Single Sales Tax Return (for goods and services) as launched on the strength of Office Memo dated December 24, 2021 without amending SRO dated June 05, 2006, “we believe, is in direct conflict with Rule 14 and we, therefore, expect that the FBR will cater to this aspect religiously at the earliest.”

    Besides legal issues, the KTBA highlighted a number of anomalies/glitches the in Single Sales Tax Return uploaded on IRIS Portal, which the tax bar said are acute and otherwise are seen as impediments in filing the correct return.

    READ MORE: KTBA submits recommendations for e-filing of appeals

  • FBR extends date for filing sales tax return

    FBR extends date for filing sales tax return

    ISLAMABAD: Federal Board of Revenue (FBR) on Monday extended date for filing sales tax return for the month of December 2021 up to January 24, 2022.

    The last date for filing the sales tax return for the month of December 2021 is January 18, 2021.

    The taxpayers are required to file their sales tax returns for the month of December 2021 through the Single Sales Tax Portal.

    READ MORE: FBR launches sales tax return filing through single portal

    The FBR on December 27, 2021 issued a notification under which it directed the taxpayers to file their sales tax returns for month of December 2021 through Single Sales Tax Portal.

    The FBR issued a notification to extend the dates for submitting stock details and payment of sales tax and federal excise as well.

    READ MORE: Power of the Board and Commissioner to call for records

    The FBR said that the date of submission of Annexure – C of Sales Tax and Federal Excise Duty, which was due on January 10, 2022 has been extended up to January 19, 2022.

    Similarly, the payment of sales tax and federal excise duty, which was due on January 15, 2022 has been extended up to January 21, 2022.

    The single portal for sales tax returns has been launched to facilitate taxpayers, promote ease of doing business and reduce compliance cost.

    READ MORE: Inland Revenue officers promoted to BS-20

    The FBR said that through this portal, sales tax registered persons shall be able to file a single sales tax return instead of having to file separate returns to the FBR and each of the different provincial sales tax authorities.

  • Dr. Alvi orders action over misconduct with 82-year taxpayer

    Dr. Alvi orders action over misconduct with 82-year taxpayer

    ISLAMABAD: The President of Pakistan, Dr. Arif Alvi, expressed dismay over misconduct of tax authorities with an 82 year old taxpayers in a refund case.

    Dr. Alvi directed the chairman of the Federal Board of Revenue (FBR) to look into the entire system of irresponsibility and corruption and take punitive action against the entire chain of decision makers involved in the case, a statement said on Sunday.

    He took exception to the decision of FBR against a senior citizen that refused him to refund a paltry sum of Rs 2,333 on frivolous grounds and dragged him into unnecessary litigation spanning over a year.

    READ MORE: Dr. Alvi rejects banker’s plea in woman harassment case

    Apologizing to the senior citizen Abdul Hamid Khan, the President said that our heads should hang in shame for the inconvenience caused by FBR to the senior citizen.

    Abdul Hamid Khan (the complainant), a senior citizen of 82 years of age, had claimed a refund of Rs 2,333 on his income tax return for the year 2020 and submitted requisite documents of advance tax deduction of the PTCL and cell phone company bills on October 19, 2020.

    The complainant e-filed refund application on October 19, 2020 followed by representation to FBR Chairman on December 24,2020.

    The Unit officer of FBR rejected his refund claim, on January 29, 2021, on the grounds that the applicant had failed to furnish the original certificates required for authentication.

    READ MORE: Alvi praises FTO role in resolving taxpayers’ complaints

    The complainant then took up the matter with the Federal Tax Ombudsman (FTO) to seek redressal of his complaint. The FTO investigated the matter and ordered FBR on June 02, 2021 to revisit the impugned order ,dated January 19, 2021, and pass a fresh order, under section 170(4) of the ordinance, after providing the complainant the opportunity for hearing as per law.

    It further ordered to identify and initiate disciplinary proceedings against the official who passed the impugned order in derogation of the law and procedures and dragged the ageing taxpayer into unnecessary litigation as well as report compliance within 45 days.

    Consequently, FBR filed a representation with the President against the original order of FTO on 24.06.2021. President Dr Arif Alvi rejected the representation of FBR.

    The President said that the complainant had admittedly furnished copies of advance tax as per certificates collected by telephone authorities. In case the Unit Officer was not satisfied with the copies of certificates, he could have not only got the same verified from the PTCL and Cell Phone Company but verification was also possible through online system.

    He observed that it was the responsibility of the duty officer to get the deduction of tax verified from the deducting authorities irrespective of certificates being original or copies/system generated, if the same were not reflecting in the system for one or the other reason.

    READ MORE: PTCL registers 7.3% revenue growth for nine months

    The President termed the failure of the officer to verify the bills from PTCL and the cell phone company through the online system as shirking from responsibility and an act of maladministration.

    He upheld that the act of the officer was a mockery and travesty of law, procedure and instructions of FBR.

    It appeared that unlawful treatment was meted out in the instant case with a view to irritate and humiliate the ageing pensioner.

    While rejecting the representation of FBR, the President said that this must be the most pitiful and shameful use of bureaucratic authority and regretted that the FBR official had wasted the time of his department, the Tax Ombudsman and the President of Pakistan over a paltry sum of Rs 2,333 and the matter had lingered for over a year.

    READ MORE: FBR announces winners of first POS prize draw

    He also deplored that no one in the long chain of bureaucrats in FBR deliberated over the issue to take note of the unfairness, pettiness and superfluousness of the matter.

    “Punitive action must be taken along the entire line of decision-makers in this case and Chairman FBR should ensure that those responsible, in particular, and others, in general, go through courses to teach them priorities and courtesies,” he directed.

  • Cash transactions above Rs50,000 not admissible

    Cash transactions above Rs50,000 not admissible

    The Federal Board of Revenue (FBR) may disallow taxpayers’ transactions under sales tax laws if those are made through cash above Rs50,000.

    The Federal Board of Revenue (FBR) issued the Sales Tax Act, 1990 updated up to June 30, 2021. The Act incorporated amendments brought through Finance Act, 2021.

    Following is the text of section 73 of the Sales Tax Act, 1990:

    73. Certain transactions not admissible.– (1) Notwithstanding anything contained in this Act or any other law for the time being in force, payment of the amount for a transaction exceeding value of fifty thousand rupees, excluding payment against a utility bill, shall be made by a crossed cheque drawn on a bank or by crossed bank draft or crossed pay order or any other crossed banking instrument showing transfer of the amount of the sales tax invoice in favour of the supplier from the business bank account of the buyer:

    Provided that online transfer of payment from the business account of buyer to the business account of supplier as well as payments through credit card shall be treated as transactions through the banking channel, subject to the condition that such transactions are verifiable from the bank statements of the respective buyer and the supplier.

    Provided further that adjustments made by a registered person in respect of amounts payable and receivable to and from the same party shall be treated as payments satisfying the provisions of this sub-section subject to following conditions, namely:–

    (a) sales tax has been charged and paid by both parties under the relevant provisions of this Act and rules prescribed thereunder, wherever applicable; and

    (b) the registered person has sought prior approval of the Commissioner before making such adjustments.

    (2) The buyer shall not be entitled to claim input tax credit, adjustment or deduction, or refund, repayment or draw-back or zero-rating of tax under this Act if payment for the amount is made otherwise than in the manner prescribed in sub-section (1), provided that payment in case of a transaction on credit is so transferred within one hundred and eighty days of issuance of the tax invoice.

    (3) The amount transferred in terms of this section shall be deposited in the business bank account of the supplier, otherwise the supplier shall not be entitled to claim input tax credit, adjustment or deduction, or refund, repayment or draw-back or zero-rating of tax under this Act.

    Explanation— For the purpose of this section, the term “business bank account” shall mean a bank account utilized by the registered person for business transactions, declared to the Commissioner in whose jurisdiction he is registered through Form STR-1 or change of particulars in registration database.

    “(4) A registered person shall not be entitled to deduct input tax (credit adjustment or deduction of input tax) which is attributable to such taxable supplies exceeding, in aggregate, one hundred million rupees in financial year or ten million rupees in a tax period as are made to certain person who is not a registered person under this Act:

    Provided that the aforesaid shall not apply to supplies made to.-

    (a) Federal / provincial / local Government departments, authorities, etc. not engaged in making of taxable supplies;

    (b) Foreign Missions, diplomats and privileged persons;

    (c) all other persons not engaged in supply of taxable goods; and

    (d) persons or classes of person, specified by the Board through notification in the official Gazette subject to such conditions and restrictions as may be specified therein.

     (Disclaimer: The text of above section is only for information. Team PkRevenue.com makes all efforts to provide the correct version of the text. However, the team PkRevenue.com is not responsible for any error or omission.)

    Reward to IR officials, whistleblowers on tax detection