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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.

  • LEAs to get cash reward under Customs Rules

    LEAs to get cash reward under Customs Rules

    ISLAMABAD: Federal Board of Revenue (FBR) will give cash rewards to law enforcement agencies (LEAs) for recovery and confiscation of smuggled or non-duty paid goods under Customs laws.

    The FBR issued SRO 1398(I)/2021 dated October 20, 2021, and proposed to include law enforcement agencies (LEAs) in Customs Reward Rules, 2021.

    According to the draft amendment, the FBR proposed to include in reward rules the “officers and officials of other law enforcement agencies who assist Customs officers and officials or are actually instrumental in the seizure of smuggled goods and vehicles as confirmed by the respective collectorate of customs, for their meritorious conduct in such cases only after realization of part or whole of the duty and taxes involved in such cases.”

    At present, the eligibility for reward stated that cash reward shall be sanctioned under the rules to the following categories of persons in cases involving evasion of duty and other taxes, and confiscation of goods, namely:

    (a) officers and officials of Pakistan Customs Service for their contribution in such cases; and

    (b) informer providing credible information leading to such confiscation or detection, as the case may be.

    As per SRO 1386(I)/2012 dated November 26, 2021, the determination of reward has been explained as the amount of reward, in cases involving evasion of duty and other taxes, and confiscation of goods shall be determined in the following manner:

    01. Where the amount of customs duty and other taxes realized is Rs500,000 or less, the amount of reward shall be 20 per cent of the customs duty and other taxes.

    02. Where the amount of customs duty and other taxes realized is more than Rs500,000 but not more than Rs1,000,000, the amount of reward shall be Rs100,000 plus 10 per cent of the customs duty and other taxes in excess of Rs500,000.

    03. Where the amount of customs duty and other taxes realized is over Rs1,000,000, the amount of reward shall be Rs150,000 plus 5 per cent of the customs duty and other taxes in excess of Rs1,000,000.

    FBR announces waiver of penal surcharge
  • FBR announces waiver of penal surcharge

    FBR announces waiver of penal surcharge

    The Federal Board of Revenue (FBR) has decided to waive the penal surcharge on goods that have overstayed at warehouses.

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  • Tax rates on transfer of motor vehicles during TY22

    Tax rates on transfer of motor vehicles during TY22

    The rates of income tax on transfer of motor vehicles during tax year 2022 to be applicable under Second Schedule of Income Tax Ordinance, 2001.

    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 are the rates of income tax transfer of motor vehicles on that shall be applicable during tax year 2022 under Section 231B:

    (1) The rate of tax under sub-sections (1) and (3) of section 231B shall be as set out in the following table:–

    TABLE

    S. No.Engine capacityTax
    (1)(2)(3)
    1.upto 850ccRs. 7,500
    2.851cc to 1000ccRs. 15,000
    3.1001cc to 1300ccRs. 25,000
    4.1301cc to 1600ccRs. 50,000
    5.1601cc to 1800ccRs. 75,000
    6.1801cc to 2000ccRs. 100,000
    7.2001cc to 2500ccRs. 150,000
    8.2501cc to 3000ccRs. 200,000
    9.Above 3000ccRs. 250,000

    2) The rate of tax under sub-sections (2) of section 231B shall be as follows:–

    S. No.Engine capacityTax
    (1)(2)(3)
    1.upto 850cc–
    2.851cc to 1000cc5,000
    3.1001cc to 1300cc7,500
    4.1301cc to 1600cc12,500
    5.1601cc to 1800cc18,750
    6.1801cc to 2000cc25,000
    7.2001cc to 2500cc37,500
    8.2501cc to 3000cc50,000
    9.Above 3000cc62,500

    Provided that the rate of tax to be collected shall be reduced by 10% each year from the date of first registration in Pakistan.

    (3) The rate of tax under sub-section (2A) of section 231B shall be as follows:—

    TABLE

    S. No.Engine capacityTax
    (1)(2)(3)
    1.Up to 1000ccRs. 50,000
    2.1001cc to 2000ccRs.100,000
    3.2001cc and aboveRs.200,000”

    (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.)

    Withholding tax rates on transfer of motor car ownership
  • Tax rates on telephone users during tax year 2022

    Tax rates on telephone users during tax year 2022

    The rates of income tax on telephone users for tax year 2022 to be applicable under Section Schedule of Income Tax Ordinance, 2001.

    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 are the rates of income tax on telephone users that shall be applicable during tax year 2022 under Section 236:

    The rate of tax shall be 10 per cent of the exceeding amount of bill in case of a telephone subscriber (other than mobile phone subscriber) where the amount of monthly bill exceeds Rs1000.

    The tax rate shall be 10 per cent for tax year 2022 and 8 per cent onwards of the amount of bill or sales price of internet pre-paid card or prepaid telephone card or sale of units through any electronic medium or whatever form in the case of subscriber of internet, mobile telephone and pre-paid internet or telephone card.

    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.

    Tax rates on usage of phone, internet for 2021-2022

    (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 electricity consumption during TY 2022
  • Tax rates on electricity consumption during TY 2022

    Tax rates on electricity consumption during TY 2022

    The rates of income tax on electricity for tax year 2022 to be applicable under Second Schedule of Income Tax Ordinance, 2001.

    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 are the rates of income tax on electricity consumption shall be applicable during tax year 2022 under Section 235:

    Electricity Consumption

    (1) The rate of collection of tax from commercial and industrial consumers from gross amount of bills shall be as set out in the following Table, namely:—

    TABLE S. NoGross amount of BillTax
    1upto Rs. 500Rs. 0
    2exceeds Rs. 500 but does not exceed Rs. 20,00010% of the amount
    3exceeds Rs.20,000Rs. 1950 plus 12% of the amount exceeding Rs.20,000 for commercial consumers Rs. 1950 plus 5% of the amount exceeding Rs.20,000 for industrial consumers

    (2) The rate of tax to be collected on domestic electricity consumption shall be—

    (i) zero percent the amount of monthly bill is less than Rs.25,000; and

    (ii) 7.5% if the amount of monthly bill is Rs. 25,000 or more;

    The rates of tax for domestic users under Section 235 have been amended and additional tax has been imposed on domestic electricity consumers. For further details please visit following link:

    Domestic electricity consumers to pay 35% additional AIT

    (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.)

    Tax rates on motor vehicles during tax year 2022
  • ATIR directs FBR to depute competent officers

    ATIR directs FBR to depute competent officers

    The Appellate Tribunal Inland Revenue (ATIR) has issued a directive to the Federal Board of Revenue (FBR), urging the deputation of competent officers to represent tax cases during hearings.

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  • Tax rates on motor vehicles during tax year 2022

    Tax rates on motor vehicles during tax year 2022

    The rates of income tax on motor vehicles for tax year 2022 to be applicable under Second Schedule of Income Tax Ordinance, 2001.

    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 are the rates of income tax on motor vehicles shall be applicable during tax year 2022:

    Rates of collection of tax under section 234,—

    (1) In case of goods transport vehicles, tax of two rupees and fifty paisa per kilogram of the laden weight shall be charged.

    (1A) In the case of goods transport vehicles with laden weight of 8120 kilograms or more, advance tax after a period of ten years from the date of first registration of vehicle in Pakistan shall be collected at the rate of twelve hundred rupees per annum;

    (2) In the case of passenger transport vehicles plying for hire with registered seating capacity of—

    S.No.CapacityRs per seat per annum
    (i)Four or more persons but less than ten persons.50
    (ii)Ten or more persons but less than twenty persons.100
    (iii)Twenty persons or more.300

    (3) In case of other private motor vehicles shall be as set out in the following Table, namely:-

    S. No.Engine capacityTax
    (1)(2)(3)
    1.upto 1000ccRs. 800
    2.1001cc to 1199ccRs. 1,500
    3.1200cc to 1299ccRs. 1,750
    4.1300cc to 1499ccRs. 2,500
    5.1500cc to 1599ccRs. 3,750
    6.1600cc to 1999ccRs. 4,500
    7.2000cc & aboveRs. 10,000

    (4) where the motor vehicle tax is collected in lump sum,

    S. No.Engine capacityTax
    (1)(2)(3)
    1.upto 1000ccRs. 10,000
    2.1001cc to 1199ccRs. 18,000
    3.1200cc to 1299ccRs. 20,000
    4.1300cc to 1499ccRs. 30,000
    5.1500cc to 1599ccRs. 45,000
    6.1600cc to 1999ccRs. 60,000
    7.2000cc & aboveRs. 120,000

    (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.)

    Tax rates on petroleum products during tax year 2022
  • Tax rates on petroleum products during tax year 2022

    Tax rates on petroleum products during tax year 2022

    The Federal Board of Revenue (FBR) has unveiled the income tax rates applicable to petroleum products for the tax year 2022 under the Second Schedule of the Income Tax Ordinance, 2001.

    (more…)
  • Tax rates on brokerage and commission in tax year 2022

    Tax rates on brokerage and commission in tax year 2022

    The Federal Board of Revenue (FBR) has released the income tax rates applicable to brokerage and commission for the tax year 2022, as outlined in the Second Schedule of the Income Tax Ordinance, 2001.

    (more…)
  • KTBA highlights issues in implementing digital payments

    KTBA highlights issues in implementing digital payments

    KARACHI: Tax practitioners have said that implementing digital payments mode for corporate entities is not possible due to various difficulties.

    Karachi Tax Bar Association (KTBA) in a letter sent on Monday to the Muhammad Ashfaq Ahmed, Chairman, Federal Board of Revenue (FBR), informed that a provision of digital payment was introduced through Tax Laws (Third Amendment) Ordinance, 2021. This provisions is scheduled to implement from November 01, 2021.

    Muhammad Zeeshan Merchant, President, KTBA said that the condition is remarkably in contradiction with other modes of payment through banking channels, which is historically remained in practice and is widely accepted under the provisions of the Income Tax Ordinance, 2001.

    “We feel that this provision of law is antibusiness; sans due diligence and is incorporated without taking the stakeholders into confidence,” he said.

    Additionally, it is not practical for many business houses, he added.

    A summary explaining certain situations (and by no means a complete synopsis) is given below:

    (a) You will appreciate that it is normal business practice that in lieu of advance delivery of goods, the buyer tenders its payment by way of post-dated cheques, which is normally accepted by the other party and is inherently a secured way of making the payment. We are afraid that this law of “digital mode of payment” is surely going to hamper the business activities, as it does not cater the situation and solution of such transactions.

    (b) Normally, it is a practice that, the port terminal charges, wharfage charges, charges for clearance of delivery orders etc., are paid in advance through crossed cheques or pay-orders. We understand that presently, the businesses, including but not limited to Port Terminal Operators and Shipping Lines, are unaware and are not ready for implantation of this “digital mode of payment”. In our view, it needs a rigorous awareness campaign for them.

    (c) Furthermore, we feel that the similar issues are likely to arise and are to be faced by the Companies for making payments to the growers of various agricultural crops such as sugar cane, rice, cotton, wheat etc. We feel that a rigorous campaign is also required for the recipients of such payments.

    (d) Moreover, in our view this “digital mode of payment” is also impractical and is likely to affect the business transactions in the cases where petty cash payments, in aggregate exceed millions of rupees, which cannot be made digitally.

    (e) Furthermore, we understand that various banks have fixed their own limitation on the quantity of making digital/online payments in a day and have also fixed the threshold of the amount and they do not allow to exceed the threshold limit fixed by them. In our view, this also needs a proper campaign without which the implementation of the law is not possible.

     The KTBA said that the tax authorities would come across with the other impediments on the subject in times to come.

    We strongly believe that, unless there is a wide off the mark in conventional banking transaction, this move is likely to create lots of trouble for the Corporate Sector.

    It is, therefore, suggested that the mandatory condition of “digital mode of payment” for Companies as envisaged U/s. 21 (la) of the Income Tax Ordinance, 2001, be allowed to run simultaneously with other conventional modes of payments for at least a year so that their business is not affected and is smoothly run till they are aware of this change in the mode of payment.

    FBR suspends credit notes against unregistered supplies