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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.

  • Sales tax on high speed diesel reduced by 31.5%

    Sales tax on high speed diesel reduced by 31.5%

    ISLAMABAD: The federal government has announced a reduction of sales tax rate by 31.5 per cent on supply of High Speed Diesel (HSD). The rate sales tax on HSD has been reduced in order to lower the impact of higher prices pass on to the consumer.

    The Federal Board of Revenue (FBR) issued SRO 1225(I)/2021 dated September 18, 2021 to notify the reduction in sales tax on HSD.

    According to the SRO the sales tax rate on HSD has been reduced to 11.64 per cent from previous level of 17.00 per cent.

    Previously, the FBR issued SRO 1072(I)/2021 dated August 26, 2021 to revise the sales tax on petroleum products.

    In the latest SRO only sales tax rate on HSD has been reduced. The sales tax rates on other petroleum products have been kept unchanged. The sales tax rates on petroleum products are: Petrol 10.54 per cent; HSD 11.64 per cent; Kerosene oil 6.70 per cent; Light Diesel Oil 0.20 per cent.

    It is worth mentioning that the federal government on September 15, 2021 announced an increase in the prices of petroleum products.

    With the announcement the petrol prices have gone up to the all-time high level. However, it is even more important that the sales tax rates are on the lowest side when compared with the rates applicable during year 2015.

    The government has increased latest prices owing to fluctuations in petroleum prices in the international market and exchange rate variation.

    Following are the rates of petroleum products, which will take effect from September 16, 2021:

    The rate of petrol has been increased by Rs5 to Rs123.30 per liter from Rs118.30.

    The rate of high-speed diesel has been increased by Rs5.01 to Rs120.04 per liter from Rs115.03.

    The rate of kerosene oil has been increased by Rs5.46 to Rs92.26 per liter from Rs86.80.

    The rate of light diesel oil has been increased by Rs5.92 to Rs90.69 from Rs84.77.

    In the latest SRO 1225(I)/2021 dated September 18, 2021, the sales tax rates on petroleum products are: Petrol 10.54 per cent; HSD 11.64 per cent; Kerosene oil 6.70 per cent; Light Diesel Oil 0.20 per cent.

    The present sales tax rates on petroleum products are much lower when compared with sales tax rates prevailed about six years ago. The FBR issued SRO 963(I)/2015 dated September 30, 2015. The sales tax rates under this SRO are: Petrol 26 per cent; Kerosene 30 per cent; High Speed Diesel 50 per cent; Light Diesel Oil 29.50 per cent.

    Petrol price increased to all-time high at Rs123.30/liter
  • Penalty amount doubles for non-filer salaried persons

    Penalty amount doubles for non-filer salaried persons

    ISLAMABAD: The Federal Board of Revenue (FBR) will recover a minimum amount of Rs10,000 as a penalty from salaried persons, who failed to file an income tax return during a tax year.

    The minimum penalty has been increased from Rs5,000 to Rs10,000.

    The changes have been brought through Tax Laws (Third Amendment) Ordinance, 2021, which was promulgated through Presidential order on September 15, 2021. The amendment has been introduced to Section 182(1) of the Income Tax Ordinance, 2001.

    According to the amendment, where any person fails to furnish a return of income as required under Section 114 within the due date:

    “Such person shall pay a penalty equal to higher of –

    (a) 0.1 per cent of the tax payable in respect of that tax year for each day of default; or

    (b) rupees one thousand for each day of default:

    Provided that minimum penalty shall be —

    (a) rupees ten thousand in case of individual having seventy-five percent or more income from salary; or

    (b) rupees fifty thousand in all other cases:

    Provided further that maximum penalty shall not exceed two hundred percent of tax payable by the person in a tax year:

    Provided also that the amount of penalty shall be reduced by 75 per cent, 50 per cent and 25 per cent if the return is filed within one, two and three months respectively after the due date or extended due date of filing of return as prescribed under the law;

    Explanation.— For the purposes of this entry, it is declared that the expression “tax payable” means tax chargeable on the taxable income on the basis of assessment made or treated to have been made under sections 120, 121, 122 or 122D.

    The following link provides previous penalty amount for not furnishing returns:

    Penalty for non-filing tax return and wealth statement

  • Domestic electricity consumers to pay 35% additional AIT

    Domestic electricity consumers to pay 35% additional AIT

    The federal government of Pakistan has introduced an additional advance income tax (AIT) of up to 35% on the consumption of electricity by individuals not appearing on the Active Taxpayers List (ATL).

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  • NADRA to compute indicative income, tax liability

    NADRA to compute indicative income, tax liability

    ISLAMABAD: National Database and Registration Authority (NADRA) has been empowered to compute indicative income and tax liability of persons using artificial intelligence and other modes.

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  • FBR to block mobile phones of non-filers

    FBR to block mobile phones of non-filers

    ISLAMABAD: The Federal Board of Revenue (FBR) has been empowered under income tax statute to block mobile phones or mobile phone SIMs of persons who have taxable income but remained non-filer of annual return.

    The government promulgated Tax Laws (Third Amendment) Ordinance, 2021, and made major amendments to the Income Tax Ordinance, 2001.

    As per the amendments, the FBR has been empowered to take strict actions against non-filers, including blocking mobile phones or mobile phone SIMs. Besides, the tax authorities have also powers to give orders to utility companies for discontinuations of electricity connection and gas connection of non-filer.

    Section 114B has been introduced through the Tax Law to the Income Tax Ordinance, 2001.

    Following is the text of the new Section:

    “114B. Powers to enforce filing of returns. — (1) Notwithstanding anything contained in any other law for the time being in force, the Board shall have the powers to issue income tax general order in respect of persons who are not appearing on Active Taxpayers List (ATL) but are liable to file return under  the provisions of this Ordinance.

    (2) The income tax general order issued under sub-section (1) may entail any or all of the following consequences for the persons mentioned therein, namely:-

    — disabling of mobile phones or mobile phone sims;

    — discontinuance of electricity connection; and

    — discontinuance of gas connection.

    (3) The Board or the Commissioner having jurisdiction over the person mentioned in the income tax general order may order restoration of mobile phones, mobile phone sims and connections of electricity and gas, in cases where he is satisfied that —

    (a) the return has been filed; or

    (b) person was not liable to file return under the provisions of this Ordinance.

    (4) No person shall be included in the general order under sub-section (1) unless following conditions have been met with, namely:-

    (a) notice under sub-section (4) of section 114 has been issued;

    (b) date of compliance of the notice under sub-section (4) of section 114 has elapsed; and

    (c) the person has not filed the return.

    (5) The action under this section shall not preclude any other action provided under the provisions of this Ordinance.

    Businesses require displaying NTN
  • FBR slaps extra sales tax up to 17% on unregistered persons

    FBR slaps extra sales tax up to 17% on unregistered persons

    In a move to enhance tax compliance, the Federal Board of Revenue (FBR) has imposed an additional sales tax of up to 17% on unregistered industrial and commercial connection holders of electricity and gas utilities.

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  • FBR reiterates not to extend return filing date

    FBR reiterates not to extend return filing date

    The Federal Board of Revenue (FBR) has reaffirmed its commitment to the September 30, 2021 deadline for filing annual tax returns, emphasizing the importance of improving the tax compliance culture in the country.

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  • Penalty for non-issuance of cash memos

    Penalty for non-issuance of cash memos

    The Federal Board of Revenue (FBR) has introduced a penalty provision under Section 182(2) of the Income Tax Ordinance, 2001 for individuals or businesses failing to issue cash memos, invoices, or receipts when required by the ordinance or related rules.

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  • Penalty for non-filing tax return and wealth statement

    Penalty for non-filing tax return and wealth statement

    Section 182(1) of Income Tax Ordinance, 2001 has prescribed penalty for non-filing of tax return and wealth statement:

    (more…)
  • Sales tax return filing portal likely to start by next month

    Sales tax return filing portal likely to start by next month

    ISLAMABAD: The single portal for filing sales tax returns – by registered taxpayers of federal and provincial tax authorities – is likely to start by next month.

    Different proposals were considered by the National Tax Council (NTC) for implementing a single portal for filing sales tax returns which are being developed and are likely to be launched by the first week of October 2021.

    The launching of the single portal for filing returns will cut the compliance cost for the taxpayers and will help increase Pakistan’s rating on Ease-of-Doing Index.

    It was decided that detailed input will be invited from Provincial Revenue Authorities (PRAs) for the development of the single Sales tax portal acceptable to all.

    Federal Minister for Finance and Revenue, Shaukat Tarin, presided over the meeting of the NTC at the Finance Division on Thursday.

    Provincial Finance Ministers, Secretary Finance Division, Chairman FBR, Chairman Sindh Revenue Board, and other senior officers also participated in the meeting. In his opening remarks, the Finance Minister welcomed the participants and emphasized the need for evolving consensus between the Federation and Provinces in matters relating to Sales tax harmonization.

    He stressed the need to resolve tax-related issues in a spirit of cooperation between the Federation and the Federating units.

    The Chairman FBR made a detailed presentation and outlined areas for further deliberation to work out an arrangement in a collaborative manner relating to the harmonization of GST amongst the Federal Government and the Provinces.

    FBR and the Provincial Finance Ministers narrated their respective positions on the taxation of transportation, restaurants, toll manufacturing and construction.

    Different proposals were also considered by the NTC for implementing the single portal for filing Sales Tax returns which are being developed and are likely to be launched by the first week of October 2021.

    The launching of single portal for filing returns will cut the compliance cost for the taxpayers and will help increase Pakistan’s rating on Ease-of-Doing Index.

    It was decided that detailed input will be invited from Provincial Revenue Authorities (PRAs) for the development of single Sales tax portal acceptable to all.

    Similarly, FBR shall also develop a standardized Income tax Return format, in consultation with the Provincial governments.

    After due deliberation with all relevant stakeholders, the National Tax Council decided that the sales tax on toll manufacturing will rest with the Federation, while taxation rights on transportation business would be vested in the Provinces.

    Regarding taxation on the construction business, it was decided that the taxation right would be shared as per the constitutional arrangements, and a technical committee consisting of all revenue authorities would decide the operational modalities.

    On taxation of restaurants, Finance Minister in his capacity as head of National Tax Council (NTC) and after having views of FBR and Provinces, decided that the Provinces will continue to tax restaurants.

    However, a reference drafted in consultation with Provinces will be sent to Law Division for an opinion on the decision. All stakeholders agreed to proceed ahead in the spirit of greater national interest and harmony under the umbrella of National Tax Council (NTC).

    Shaukat Tarin for finalizing tax harmonization at earliest