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181D. Business licence scheme.-(1) Every person engaged in any business, profession or vocation shall be required to obtain and display a business licence as prescribed by the Board.
(2) Where a person fails to obtain business licence under sub-section (1), the Commissioner may, in addition to and not in derogation of any punishment to which the person may be liable under this Ordinance or any other law, impose a fine of –
(a) twenty thousand Rupees, in case of a taxpayer deriving income chargeable to tax under this Ordinance; or
(b) five thousand Rupees, in all other cases.
(3) The Commissioner may, by an order in writing, cancel a business licence issued under sub-section (1) after providing an opportunity of being heard to the person, if –
(a) such person fails to notify any change in particulars within thirty days of such charge; or
(b) such person is convicted of any offence under any federal tax law.
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The Federal Board of Revenue (FBR) in Pakistan has reinforced the requirement for businesses to prominently display their National Tax Number (NTN) at all places of operation, in accordance with Section 181C of the Income Tax Ordinance, 2001.
In a progressive move towards acknowledging and rewarding responsible taxpayers, the Federal Board of Revenue (FBR) has introduced the concept of a taxpayer honor card through an amendment to the Income Tax Ordinance, 2001.
The Federal Board of Revenue (FBR) has reported a substantial increase in the collection of Federal Excise Duty (FED) during the fiscal year 2020/2021, with the duty on cigarette sales leading the way.
The Federal Board of Revenue (FBR) has fortified its tax administration toolkit with Section 181A of the Income Tax Ordinance, 2001, which delineates the creation and regulation of the Active Taxpayers’ List (ATL).
The Federal Board of Revenue (FBR) has fortified its ability to gather information on incomes from industrial and commercial undertakings exempt from tax.
The FBR said it is contemplating reduction in number of withholding tax lines without compromising the documentation contribution of these taxes. “Nine withholding taxes have already been abolished and further reduction is under consideration,” the FBR said in a report..
The FBR aims at re-designing the tax system on ideal principles of taxation, which, inter alia, includes moving towards taxation of net profits under income tax and subjecting all taxable supplies to standard sales tax regime. The initiative involves removal of tax distortions, unnecessary exemptions, tax reductions, zero rating etc. Major guiding principles of tax policy include:-
Corporate income tax reforms—- removal of redundant tax credits, accelerated depreciation, exemptions, reduced rates, exemption from specific provisions etc. This aspect has already been completed by promulgation of Tax Laws (Second Amendment) Ordinance, 2021.
Personal Income Tax Reforms—- removal of unnecessary exemptions and rationalization of tax rates and reduction of tax slabs to simplify tax procedures for swift and hassle-free compliance.
Rationalization of minimum taxes— FBR is rationalizing presumptive and minimum tax regimes in an effort to realize revenue according to the actual potential of taxpayers.
Removal of procedural complications in tax compliance— Complexities in tax procedures are being removed in order to facilitate compliance.
Removal of anomalies in General Sales Tax on goods—- This involves removal of unnecessary exemptions, reduced rates, zero rating, special tax regimes. The broad guideline is that exemptions / concessions available to all goods except essential food items, health and education related goods are to be reviewed.
Sales tax harmonization —- FBR is pursuing sales tax harmonization with the provincial revenue authorities which includes common definition of goods and services, common minimum threshold, harmonized tax rates, single portal and single sales tax return. The initiative is-expected to complete in medium term.
Promoting ease of doing business— Cognizant of difficulties faced by taxpayers in making tax compliance, FBR is introducing such facilitating measures as making CNIC as the unique identifier for all taxes administered by FBR, harmonization of valuation table for immovable properties with provinces and establishing one-window operations at various compliance levels.
Section 179 of the Income Tax Ordinance, 2001 grants the Commissioner the authority to enlist translators for documents not in the Urdu or English language.
ISLAMABAD: The Federal Board of Revenue (FBR) has issued 650,000 notices to consumers of electricity and gas, who are not in the tax net, in its efforts to enhance tax compliance.
The FBR said that data has been obtained from DISCOs and Gas Companies for broadening of tax base. More than 650,000 notices have been issued on the basis of data obtained from DISCOs and in lieu of these notices 129,541 returns have been enforced so far.
The FBR has undertaken unprecedented enforcement measures to ensure filing of returns. Resultantly, the number of income tax return filers for TY2020 has crossed 3.1 million.
Tax Asaan, has been launched which provides basic verification features like ATL, Online NTN/STRN inquiry, exemption certificates and sales tax registration. Facility for filing income tax returns for salaried class has also been included in the application.
In order to develop 360 degree view of tax payers, data sources like banks, vehicles and real estate transactions have been captured and a Data Bank has been developed. Based on this data bank, notices to more than 200,000 high net-worth un-registered persons have been issued.
To ensure proper declaration of sales by retailers and to realize due revenue from them, FBR has initiated the integration of all sales outlets of tier-1 retailers with FBR’s central computerized system. The system shall ensure that all sales are reported in real-time to FBR and are duly accounted for in monthly sales tax returns of such retailers.
The scheme was initially launched for textile and leather retailers last year which has now been made mandatory for all tier-1 retailers with effect from 15th December 2019.
The field offices have been directed to undertake surveys in their respective jurisdictions and ensure integration of all tier-1 retailers.
In order to prevent leakage of revenue, under-reporting of production and sales, and to ensure proper payment of FED and Sales Tax on the manufacture and sale of specified goods/ products, FBR has initiated the implementation of Track and Trace System for specified goods/ products i.e. Tobacco, Cement, Sugar, Fertilizer and Beverages imported into or manufactured in Pakistan.
Sectorial analysis of huge business concerns has been conducted across the country by Assessment & Processing Units in all field formations of IRS. Sectors like cement, sugar, cotton and tobacco remained under focus. Legal action has been initiated against the defaulting units.
Legal actions (attachment of properties, arrests and seizures) has been made against huge tax-defaulters to create deterrence against tax-evaders.
Establishment of Inland Revenue Enforcement Network (IREN) to check smuggling and counterfeit products. Inland Revenue Service and Pakistan Customs Service have joined hands for anti-smuggling field intelligence exercise.
FBR has launched Maloomat (tax profiling system) on its web portal, containing data of 53 million citizens, giving access to the filers and non-filers to the information about their assets and bank accounts available with FBR.
