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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.

  • Single sales tax portal to start functioning by month-end

    Single sales tax portal to start functioning by month-end

    ISLAMABAD: The single sales tax portal is likely to start functioning by end of October 2021 to facilitate taxpayers falling under all federal and provincial revenue jurisdictions.

    In a statement, the Federal Board of Revenue (FBR) said that building further on its ongoing drive for digitization and automation of various processes involved in revenue collection, the FBR had developed “Single Sales Tax Portal” to facilitate the taxpayers and ensure the ease of doing business.

    This watershed development of the Single Tax Portal developed by FBR is the outcome of various rounds of negotiations between FBR and the provincial revenue authorities.

    The FBR has already offered this portal to the provincial revenue authorities in order to facilitate the taxpayers through one-link facility. The portal is in the final stages of testing and is likely to be launched by the last week of October, 2021.

    It is pertinent to mention that till now, Sales Tax registered persons had to file their monthly Sales Tax returns separately to every tax jurisdiction where they conducted business, such as FBR, Sindh Revenue Board, Punjab Revenue Authority, Khyber Pakhtunkhwa Revenue Authority and Balochistan Revenue Authority. Some of the taxpayers had to file returns with revenue authorities of Azad Jammu & Kashmir and Gilgit-Baltistan.

    This was a cumbersome task, which often led to complications and disputes over jurisdiction.

    Single Sales Tax Portal will also help in simplification of the tax procedures. It will enable the taxpayers to save time and effort, and reduce their compliance costs. By minimizing data entry, it also addresses the issues of data and calculation errors.

    The system will automatically apportion input tax adjustment as well as tax payments across the sales tax authorities. Through this system, officers of all revenue authorities will be able to make better informed decisions about matters related to Sales Tax.

    The single portal system is a significant milestone towards taxpayers’ facilitation and a big leap forward towards harmonization of taxes between the Federal Government and the provinces.

    Sales tax return filing portal likely to start by next month
  • FBR receives 1.86 million tax returns for TY2021

    FBR receives 1.86 million tax returns for TY2021

    ISLAMABAD: The Federal Board of Revenue (FBR) has received 1.86 million returns of income for tax year 2021 up to September 30, 2021.

    This was disclosed at a meeting of Board-in-Council held recently.

    The Board-in-Council meeting appreciated the comprehensive print and electronic media campaign launched by the FATE Wing which helped FBR receive massive number of 1.86 million returns September 30, 2021 generating tax of Rs39 billion with the returns.

    This was fifth Board-in-Council meeting of the FBR, which was held under the chairmanship of Dr. Muhammad Ashfaq Ahmed, Chairman FBR.

    The Board-in-Council members deliberated upon the decent growth of 38.3 per cent in revenue collection for the first quarter (July-September) of the current FY 2021-22 and conveyed their appreciation for the field formations.

    The net revenue collection of Rs. 1,395 billion, exceeding the set target for the first quarter, has also been appreciated by the prime minister.

    The Board-in-Council also devised a robust strategy to keep the same momentum of revenue collection in the second quarter starting (October to December) of the current Financial Year.

    They expressed their strong resolve to collect substantial revenue in the second quarter and thus exceed target set for this period.

    The members, particularly, mentioned about the impact created by the videos of national heroes and renowned celebrities appealing the general public through social media to file their returns within due date.

    They thanked all the national heroes for their valued support in making this campaign highly successful. The members also lauded the initiative of FATE Wing to use all cellular companies for SMS outreach to the people to file their tax returns.

    Furthermore, the Board-in-Council also decided to speed up the measures required to broaden the tax base, document the economy through POS and fast track implementation of Track and Trace System on Tobacco, Sugar, Fertilizers, Cement, Beverages, Petroleum and Pharmaceutical sectors.

    FBR surpasses quarterly revenue target by Rs186 billion
  • Advance tax on sales to distributors, dealers, wholesalers

    Advance tax on sales to distributors, dealers, wholesalers

    Section 236G of Income Tax Ordinance, 2001 defined rates of advance income tax on sales to distributors, dealers and wholesalers.

    The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.

    Following is the text of Section 236G of Income Tax Ordinance, 2001:

    236G. Advance tax on sales to distributors, dealers and wholesalers.— (1) Every manufacturer or commercial importer of pharmaceuticals, poultry and animal feed, edible oil and ghee, auto-parts, tyres, varnishes, chemicals, cosmetics, IT equipment, electronics, sugar, cement, iron and steel products, fertilizer, motorcycles, pesticides, cigarettes, glass, textile, beverages, paint or foam sector, at the time of sale to distributors, dealers and wholesalers, shall collect advance tax at the rate specified in Division XIV of Part IV of the First Schedule, from the aforesaid person to whom such sales have been made.

    Advance tax on sale to distributors, dealers or wholesalers.

    The rate of collection of tax under section 236G shall be as set out in the following table namely:-

    TABLE S.No.Category of SaleRate of Tax
    (1)(2)(3)
    1.Fertilizers0.7%
    2.Other than Fertilizers0.1%

    (2) Credit for tax collected under sub-section (1) shall be allowed in computing the tax due by the distributor, dealer or wholesaler on the taxable income for the tax year in which the tax was collected.

    (Disclaimer: The text of the 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.)

    Advance tax on sale or transfer of immovable property
  • Advance tax on sale or transfer of immovable property

    Advance tax on sale or transfer of immovable property

    Section 236C of Income Tax Ordinance, 2001 has explained the application of the advance tax on the sale or transfer of immovable properties.

    The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.

    Following is the text of Section 236C of Income Tax Ordinance, 2001:

    236C. Advance Tax on sale or transfer of immovable Property.—(1) 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 from the seller or transferor advance tax at the rate specified in Division X of Part IV of the First Schedule:

    Tax rates on immovable properties for 2021-2022

    Explanation,—For removal of doubt, it is clarified that the person responsible for registering, recording or attesting transfer includes person responsible for registering, recording or attesting transfer for local authority, housing authority, housing society, co-operative society, public and private real estate projects registered/governed under any law, joint ventures, private commercial concerns and registrar of properties.

    Provided that this sub-section shall not apply to a seller, being the dependant of a Shaheed belonging to Pakistan Armed Forces or a person who dies while in the service of the Pakistan Armed Forces or the service of Federal or Provincial Government, in respect of first sale of immovable property acquired from or allotted by the Federal Government or Provincial Government or any authority duly certified by the official allotment authority, and the property acquired or allotted is in recognition of or for services rendered by the Shaheed or the person who dies in service:

    Provided further that if the seller or transferor is a non-resident individual holding Pakistan Origin Card (POC) or National ID Card for Overseas Pakistanis (NICOP) or Computerized National ID Card (CNIC) who had acquired the said immovable property through a Foreign Currency Value Account (FCVA) or NRP Rupee Value Account (NRVA) maintained with authorized banks in Pakistan under the foreign exchange regulations issued by the State Bank of Pakistan, the tax collected under this section from such persons shall be final discharge of tax liability in lieu of capital gains taxable under section 37 earned by the seller or transferor from the property so disposed of.

    (2) The Advance tax collected under sub-section (1) shall be adjustable:

    Provided that where immovable property referred to in sub-section (1) is acquired and disposed of within the same tax year, the tax collected under this section shall be minimum tax.

    (3) Advance tax under sub-section (1) shall not be collected if the immovable property is held for a period exceeding four years.

    (4) Sub-section (1) shall not apply to:—

    (a) a seller, if the seller is dependent of:

    (i) a seller, if the seller is dependent of:

    a Shaheed belonging to Pakistan Armed Forces; or

    (ii) a person who dies while in the service of the Pakistan Armed Forces or the Federal and Provincial Governments; and

    (b) to the first sale of immovable property which has been acquired or allotted as an original allottee, duly certified by the official allotment authority.

    (Disclaimer: The text of the 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.)

    Advance tax on sale through auction
  • Advance tax on sale through auction

    Advance tax on sale through auction

    Section 236A of Income Tax Ordinance, 2001 describes the advance tax on sale through auction. The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021.

    (more…)
  • Advance tax rates on telephone and internet users

    Advance tax rates on telephone and internet users

    Section 236 of Income Tax Ordinance, 2001 has explained the advance tax rates on telephone and internet users.

    The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.

    Following is the text of Section 236 of Income Tax Ordinance, 2001:

    236. Telephone and internet users.- (1) Advance tax at the rates specified in Division V Part IV of the First Schedule shall be collected on the amount of –

    (a) telephone bill of a subscriber;  

    (b) prepaid cards for telephones;

    (c) sale of units through any electronic medium or whatever form; and

    “(d) internet bill of a subscriber; and

    (e) prepaid cards for internet.”

    (2) The person preparing the telephone or internet bill shall charge advance tax under sub-section (1) in the manner telephone or internet charges are charged.

    (3) The person issuing or selling prepaid cards for telephones or internet shall collect advance tax under sub-section (1) from the purchasers at the time of issuance or sale of cards.

    (3A) The person issuing or selling units through any electronic medium or whatever form shall collect advance tax under sub-section (1) from the purchaser at the time of issuance of sale of units.

    (4) Advance tax under this section shall not be collected from Government, a foreign diplomat, a diplomatic mission in Pakistan, or a person who produces a certificate from the Commissioner that his income during the tax year is exempt from tax.

    (Disclaimer: The text of the 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.)

    Tax rates on usage of phone, internet for 2021-2022
  • Advance tax rates on electricity consumption

    Advance tax rates on electricity consumption

    Section 235 of Income Tax Ordinance, 2001 has explained the advance tax rates on electricity consumption.

    The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.

    Following is the text of Section 235 of Income Tax Ordinance, 2001:

    235. Electricity consumption.- (1) There shall be collected advance tax at the rates specified in Division IV of Part-IV of the First Schedule on the amount of electricity bill of a commercial or industrial or domestic consumer:

    Provided that the provisions of sub-section (1) shall not apply to a domestic consumer of electricity if his name appears on the Active Taxpayers’ List.

    (2) The person preparing electricity consumption bill shall charge advance tax under sub-section (1) in the manner electricity consumption charges are charged.

    Explanation.— For removal of doubt, it is clarified that for the purposes of this section electricity consumption bill referred to in sub-section (2) means electricity bill inclusive of sales tax and all incidental charges.

    (3) Advance tax under this section shall not be collected from a person who produces a certificate from the Commissioner that his income during tax year is exempt from tax or that he has discharged advance tax liability under section 147 or whose entire income is subject to final tax regime or minimum tax regime under any provisions of this Ordinance other than this section.

    (4) Under this section, —

    (a) in the case of a taxpayer other than a company, tax collected upto bill amount of three hundred and sixty thousand Rupees per annum shall be treated as minimum tax on the income of such persons and no refund shall be allowed;

    (b) in the case of a taxpayer other than a company, tax collected on monthly bill over and above thirty thousand rupees per month shall be adjustable; and

    (c) in the case of a company, tax collected shall be adjustable against tax liability.

    (Disclaimer: The text of the 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.)

    Domestic electricity consumers to pay 35% additional AIT
    Tax rates on electricity consumption during 2021-2022
  • Advance income tax on motor vehicles

    Advance income tax on motor vehicles

    Section 234 of Income Tax Ordinance, 2001 has defined the rate of advance income tax on motor vehicles to be collected by persons collecting motor vehicle tax.

    The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.

    Following is the text of Section 234 of Income Tax Ordinance, 2001:

    234. Tax on motor vehicles.— (1) Any person at the time of collecting motor vehicle tax shall also collect advance tax at the rates specified in Division III of Part IV of the First Schedule.

    (2) If the motor vehicle tax is collected in instalments or lump sum the advance tax may also be collected in instalments or lump sum in like manner.

    (2A) In respect of motor cars used for more than ten years in Pakistan, no advance tax shall be collected after a period of ten years.

    (3) In respect of a passenger transport vehicle with registered seating capacity of ten or more persons, advance tax shall not be collected after a period of ten years from the first day of July of the year of make of the vehicle.

    (4) In respect of a goods transport vehicle with registered laden weight of less than 8120 kilograms, advance tax shall not be collected after a period of ten years from the date of first registration of vehicle in Pakistan.

    (5) Advance tax collected under this section shall be adjustable.

    “(6) For the purpose of sub-sections (1) and (2) “motor vehicle” shall include the vehicles specified in sub-section (7) of section 231B.”

     (Disclaimer: The text of the 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.)

    Tax rates on passenger, goods transport vehicles
  • Income tax on payment for brokerage, commission

    Income tax on payment for brokerage, commission

    Section 233 of Income Tax Ordinance, 2001 has defined rate of income tax on payment on account of brokerage and commission.

    The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.

    Following is the text of Section 233 of Income Tax Ordinance, 2001:

    233. Brokerage and commission. — (1) Where any payment on account of brokerage or commission is made by the Federal Government, a Provincial Government, a Local Government, a company or an association of person or

    individual having turnover of hundred million rupees or more (hereinafter called the “principal”) to a person (hereinafter called the “agent”), the principal shall deduct advance tax at the rate specified in Division II of Part IV of the First Schedule from such payment.

    (2) If the agent retains Commission or brokerage from any amount remitted by him to the principal, he shall be deemed to have been paid the commission or brokerage by the principal and the principal shall collect advance tax from the agent.

    (2A) Notwithstanding the provisions of sub-section (1), where the principal is making payment on account of commission to an advertising agent, directly or through electronic or print media, the principal shall deduct tax (in addition to tax required to be deducted under clause (b) of sub-section (1) of section 153 on advertising services excluding commission), at the rate specified in Division II of Part IV of the First Schedule on the amount equal to-

    A x 15/85

    Where A = amount paid or to be paid to electronic or print media for advertising services (excluding commission) on which tax is deductible under clause (b) of sub-section (I) of section 153.

    (2B) Tax deducted under sub-section (2A) shall be minimum tax on the income of the advertising agent.

    (3) Where any tax is required to be collected from a person under sub-section (1), such tax shall be the minimum tax on the income of such persons.

    (Disclaimer: The text of the 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.)

    For income tax rates on brokerage and commission please visit the following link:

    Tax rates on brokerage, commission for 2021-2022

  • Date extension to become useless on flawed return form

    Date extension to become useless on flawed return form

    Karachi Tax Bar Association (KTBA) on Wednesday pointed out that serious technical issues in online return form are not resolved and the date extension granted by the Federal Board of Revenue (FBR) will become useless.

    The FBR through Circular No. 08 extended the last date for filing income tax return for tax year 2021 up to October 15, 2021 from September 30, 2021. The FBR extended the date after admitting serious technical problems on the IRIS – the online return filing portal.

    The KTBA wrote a letter to FBR Chairman Dr. Muhammad Ashfaq Ahmed apprising him about computational errors and technical issues in filing of income tax return for the tax year 2021.

    In his letter KTBA President Muhammad Zeeshan Merchant said that technical issues were not rectified yet and taxpayers were facing difficulties in filing their returns.

     “The 90 days time prescribed under section 118 of the Income Tax Ordinance, 2001, will only begin once the due diligence prescribed in law and rules is following in pitch and substance and a complete and flawless return of income is notified in terms of Section 237 of the Income Tax Ordinance, 2001,” Merchant said.

    The tax bar said the issues were previously highlighted related to erroneous tax computation on the IRIS portal with respect to income expressed as ‘minimum tax’, where owing to pre-fixed attributes/formulas taxpayer are forced to pay additional tax or file mix-up return.

    This issue despite being pitted to judicial wrangling before the Lahore High Court in writ jurisdiction dated September 24, 2021, has not been resolved as yet, Merchant added

    Furthermore, the return of income at the IRIS still suffers technical issues and anomalies that were already highlighted through the KTBA letter dated September 21, 2021. The issues are included: loss on disposal of securities; incorrect working of tax on foreign incomes; discrepancies in tax computation of commercial importers; tax on fee for technical services/royalty of a non-resident person etc.

    The KTBA pointed out that simplified return of income for SMEs was unceremoniously uploaded on IRIS portal without prescribing a draft return.

    No further return filing date extension after Oct 15th: FBR