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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.

  • Finance Act, 2021: Withholding tax on phone, internet usage reduced

    Finance Act, 2021: Withholding tax on phone, internet usage reduced

    ISLAMABAD: The Federal Board of Revenue (FBR) on Thursday said that the withholding tax rates on usage of phone and internet have been reduced to 10 per cent from 12.5 per cent with effect from July 01, 2021.

    For tax year 2022 the rate has been reduced to 10 per cent and it will be further reduced to 8 per cent beyond the tax year 2022.

    The FBR said that the withholding tax is applicable under Section 236 of the Income Tax Ordinance, 2001. Through the Finance Act, 2021 the withholding tax rates on the usage of phone and internet have been reduced from 12.5 per cent to 10 per cent for tax year 2022 and 8 per cent onwards.

    The FBR said that the Finance Act, 2021 inclusion of telecommunication sector in the definition of industrial undertaking under clause (29C) of section 2 of the Ordinance. This will enable them to adjust tax

    deducted under section 148 on import of capital equipment and plant & machinery for their own use. Reduction of withholding tax rate under section 153(1) of the Ordinance on telecommunication services from 8 per cent to 3 per cent under minimum tax regime.

  • FBR registers 71 cases of money laundering in FY21

    FBR registers 71 cases of money laundering in FY21

    ISLAMABAD: The Federal Board of Revenue (FBR) on Thursday said that around 71 cases of money laundering have been registered during FY21 (2020/2021) in which an amount of Rs62 billion is involved.

    The FBR said that its wing i.e. Directorate General of Intelligence & Investigation-IR showed commendable performance during July 2020 to June 2021.

    During this period, Directorate General forwarded 1,608 Investigation Reports and Red Alerts to the field formations involving revenue amounting to Rs244 billion.

    The Directorate General filed 71 complaints under Anti-Money Laundering Act, 2010 where more than Rs. 62 billion were involved.

    The Directorate General seized 8,754 cartons containing 87,540,000 cigarette sticks during the period of July 2020 to June 2021.

  • FBR receives 3.01 million income tax returns

    FBR receives 3.01 million income tax returns

    ISLAMABAD: Federal Board of Revenue (FBR) on Thursday said it has received 3.01 million income tax returns for tax year 2020 till June 30, 2021.

    “FBR’s efforts to broaden the tax base are expanding apace. Early signs suggest such efforts are bearing fruits,” it said in a statement.

    As on June 30, 2021, income tax returns for Tax Year 2020 have reached 3.01 million as compared to 2.67 million in Tax Year 2019, showing an increase of 12.5 per cent.

    The tax deposited with returns was Rs.52 billion compared to only Rs.34.3 billion last year, showing an increase of 52.1 per cent.

    The FBR said that 11,100 point of sale terminals have been integrated with the real time reporting system of the revenue body.

  • Annual tax collection grows by 18% to Rs4.732 trillion: FBR

    Annual tax collection grows by 18% to Rs4.732 trillion: FBR

    ISLAMABAD: Federal Board of Revenue (FBR) has collected Rs4.732 trillion during fiscal year 2020/2021 surpassing the annual target of Rs4.69 trillion by Rs41 billion.

    This represents a growth of about 18 per cent over the collection of Rs. 3,997 billion during the same period last year.

    The net collection for the month of June was Rs. 568 billion representing an increase of 26 per cent over Rs. 451 billion collected in June 2020.

     The year-on-year growth of 18 per cent is unprecedented particularly as it is realized on the heel of 26 per cent growth in June.

    These figures would further improve before the close of the day and after book adjustments have been taken into account.

    On the other hand, the gross collections increased from Rs. 4,132 billion during this period last year to Rs. 4,983 billion, showing an increase of 21 per cent.

    The amount of refunds disbursed was Rs. 251 billion compared to Rs. 135 billion paid last year, showing an increase of 86 per cent. This is reflective of FBR’s resolve to fast-track refunds to prevent liquidity shortages in the industry.

    The improved revenue performance is even more significant due to adoption of ‘no-undue’ advances policy as well as effective enforcement by field formations. It is also a reflection of growing economic activities in the country despite facing the challenge of third wave of COVID-19.

  • To whom filing income tax return for tax year 2021 mandatory

    To whom filing income tax return for tax year 2021 mandatory

    KARACHI: The Federal Board of Revenue (FBR) on Thursday launched its IRIS portal for filing income tax returns for tax year 2021.

    Filing of a return of income is mandatory under Section 114 of the Income Tax Ordinance, 2001.

    Section 114: Return of income. — (1) Subject to this Ordinance, the following persons are required to furnish a return of income for a tax year, namely:–

    (a) every company;

    (ab) every person (other than a company) whose taxable income for the year exceeds the maximum amount that is not chargeable to tax under this Ordinance for the year; or

    (ac) any non-profit organization as defined in clause (36) of section 2;

    (ad) any welfare institution approved under clause (58) of Part I of the Second Schedule;

    (ae) every person whose income for the year is subject to final taxation under any provision of this Ordinance;

    (b) any person not covered by clause (a), (ab), (ac) or (ad) who,—

    (i) has been charged to tax in respect of any of the two preceding tax years;

    (ii) claims a loss carried forward under this Ordinance for a tax year;

    (iii) owns immovable property with a land area of five hundred square yards or more or owns any flat located in areas falling within the municipal limits existing immediately before the commencement of Local Government laws in the provinces; or areas in a Cantonment; or the Islamabad Capital Territory;

    (iv) owns immoveable property with a land area of five hundred square yards or more located in a rating area;

    (v) owns a flat having covered area of two thousand square feet or more located in a rating area;

    (vi) owns a motor vehicle having engine capacity above 1000 CC;

    (vii) has obtained National Tax Number; or

    (viii) is the holder of commercial or industrial connection of electricity where the amount of annual bill exceeds rupees five hundred thousand;

    (ix) is a resident person registered with any chamber of commerce and industry or any trade or business association or any market committee or any professional body including Pakistan Engineering Council, Pakistan Medical and Dental Council, Pakistan Bar Council or any Provincial Bar Council, Institute of Chartered Accountants of Pakistan or Institute of Cost and Management Accountants of Pakistan; or

    (x) is a resident person being an individual required to file foreign income and assets statement under section 116A.

    (1A) Every individual whose income under the head ‘Income from business’ exceeds rupees three hundred thousand but does not exceed rupees four hundred thousand in a tax year is also required to furnish return of income from the tax year.

    A return of income under section 114 of a company shall be furnished —

    (a) in the case of a company with a tax year ending any time between the first day of January and the thirtieth day of June, on or before the thirty-first day of December next following the end of the tax year to which the return relates; or

    (b) in any other case, on or before the thirtieth day of September next following the end of the tax year to which the return relates.

  • Return filing for tax year 2021 commences

    Return filing for tax year 2021 commences

    ISLAMABAD: Unlike past practice of delayed opening of income return filing, the Federal Board of Revenue (FBR) has opened the IRIS portal for filing annual return of income for tax year 2021 from July 01, 2021.

    The taxpayers can login with their ID and password to the IRIS portal of the FBR and file their income tax return.

    The FBR on Thursday also launched the income tax return forms for salaried persons, association of persons and companies having special tax years.

    In the past the FBR was under criticism for delayed issuance of income tax return form which resulted in multiple extensions in date for filing the returns.

    As the FBR opened the portal for return filing of tax year 2021 therefore the last date is September 30, 2021 in case of salaried persons, AOPs and companies.

  • Finance Act, 2021: FBR to boost revenue collection through various revenue measures

    Finance Act, 2021: FBR to boost revenue collection through various revenue measures

    ISLAMABAD: The Federal Board of Revenue (FBR) shall boost tax collection through various measures adopted through Finance Act, 2021.

    The changes have been implemented from Thursday July 01, 2021 for the fiscal year 2021/2022.

    The sources in the FBR said that the revenue measures are included a special regime for export of services at par with export of goods to be taxed at the rate of one per cent under final tax regime.

    Through Finance Act, 2021, block taxation of property income has been eliminated and the same is shifted to normal tax regime.

    The rate of capital gain tax has been enhanced on disposal of immovable properties.

    Reduction in block taxation on interest income has been allowed, if it exceeds Rs5 million.

    The interest income from federal government securities would be taxed under final tax regime at the rate of 15 per cent.

    Tax on “on” money on vehicles has been continued for the fiscal year 2021/2022, if vehicle is disposed without registration.

    The withholding tax scope has been expanded on supply chain below manufacturers and importers of specified sectors.

    The reduced threshold monthly electricity bill for withholding tax on electricity consumption has been reduced from 75,000 to 25,000 from domestic users not appearing on Active Taxpayers’ list (ATL).

    The tax authorities would not require issuing separate notice in concealment cases.

    Scope of withholding agents has been broadened for the purpose of collection of withholding tax on commission income under section 233 of Income Tax Ordinance, 2001.

    Withholding tax has been streamlined on sale and purchase of immoveable property under section 236C and 236K of the Ordinance.

  • FBR to arrest persons on concealment above Rs25 million

    FBR to arrest persons on concealment above Rs25 million

    ISLAMABAD: The Federal Board of Revenue (FBR) has been empowered to arrest a person for concealing above Rs25 million under code of criminal procedure.

    Through Finance Act, 2021 a new section 203B has been inserted to Income Tax Ordinance, 2001, which stated as follow:

    203B. Power to arrest and prosecute:

    (1) Where on the basis of material evidence brought on record, as a result of audit conducted by the auditors in terms of sub-section (8) of section 177 read with section 214C of this Ordinance, an assessment is made or amended under section 121 or 122 of this Ordinance, as the case may be, and the assessing officer records a finding that the taxpayer has committed the offence of concealment of income which has resulted in non-payment of tax of Rupees one hundred million and above in case of a filer and rupees twenty five million or above in case of non-filer, the taxpayer may be arrested after obtaining written approval of the committee specified under sub-section (2).

    (2) The committee under sub-section (1) shall comprise the Minister for Finance and Revenue, the Chairman of the Board and the senior most member of the Board.

    (3) All arrests made under this Ordinance shall be carried out in accordance with the relevant provisions of the Code of Criminal Procedure, 1898 (Act V of 1898).

    (4) Notwithstanding anything contained in sub-sections (1) and (2) or any other provision of this Ordinance, where any person has committed offence of concealment of income or any offence warranting prosecution under this Ordinance, the Chief Commissioner with the prior approval of the Board may, either before or after the institution of any proceedings for recovery of tax, compound the offence if such person pays the amount of tax due along with such default surcharge and penalty as is determined under the provisions of this Ordinance.

    (5) Where the person suspected of offence of concealment of income or any offence warranting prosecution under this Ordinance is a company, every director or officer of that company whom the authorised officer has reason to believe is personally responsible for actions of the company contributing to offence of concealment of income or any offence warranting prosecution under this Ordinance shall be liable to arrest:

    Provided that any arrest under this sub-section shall not absolve the company from the liabilities of payment of tax, default surcharge and penalty imposed under this Ordinance.

    Through the Finance Act, 2021 another Section 203C has been inserted to the Income Tax Ordinance, 2001 under which procedure has been laid down to follow on arrest of a person.

    Following is the text of Section 203C:

    203C. Procedure to be followed on arrest of a person.– (1) When an officer of Inland Revenue authorized under sub-section (1) of section 203B in this behalf arrests a person under section 203B, he shall immediately intimate the fact of the arrest of that person to the Special Judge who may direct such officer to produce that person at such time  and place and on such date as the Special Judge considers expedient and such Officer shall act accordingly.

    (2) Notwithstanding anything contained in the sub-section (1), any person arrested under this Ordinance shall be produced before the Special Judge or, if there is no Special Judge within a reasonable distance, to the nearest Judicial Magistrate, within twenty-four hours of such arrest, excluding the time necessary for the journey from the place of arrest to the Court of the Special Judge or, as the case may be, of such Magistrate.

    (3) When any person is produced under sub-section (2) before the Special Judge, he may, on the request of such person, after perusing the record, if any and after giving the prosecution an opportunity of being heard, admit him to bail on his executing a bond, with or without sureties, or refuse to admit him to bail and direct his detention at such place as he deems fit:

    Provided that nothing herein contained shall preclude the Special Judge from cancelling the bail of any such person at a subsequent stage if, for any reason, he considers such cancellation necessary, but before passing such order he shall afford such person an opportunity of being heard, unless for reasons to be recorded he considers that the affording of such opportunity shall defeat the purposes of this Ordinance.

    (4) When such person is produced under sub-section (2) before a Judicial Magistrate, such Magistrate may, after authorising his detention in such custody at such place and for such period as he considers necessary or proper for facilitating his earliest production before the Special Judge, direct his production before the Special Judge on a date and time to be fixed by him or direct such person to be forthwith taken to, and produced before, the Special Judge and he shall be so taken.

    (5) Nothing in sub-section (3) or sub-section (4) shall preclude the Special Judge or the Judicial Magistrate from remanding any such person to the custody of an officer of Inland Revenue holding inquiry against that person if such officer makes a request in writing to that effect, and the Special Judge or the Judicial Magistrate, after perusing the record, if any, and hearing such person, is of the opinion that for the completion of inquiry or investigation it is necessary to make such order:

    Provided that the period of such custody shall not exceed more than fourteen days.

    (6) When any person is arrested under this Ordinance, an officer of Inland Revenue shall record the fact of arrest and other relevant particulars in the register specified in sub-section (10) and shall immediately proceed to inquire into the charge against such person and if he completes the inquiry within twenty four hours of his arrest, excluding the time necessary for journey as aforesaid, he may, after producing such person before the Special Judge or the nearest Judicial Magistrate, make a request for his further detention in his custody.

    (7) While holding an inquiry under sub-section (6), an officer of Inland Revenue shall exercise the same powers as are exercisable by an officer in charge of a police station under the Code of Criminal Procedure, 1898 (Act V of 1898), but such officer shall exercise such powers subject to the foregoing provisions of this section while holding an inquiry under this Ordinance.

    (8) If an officer of Inland Revenue, after holding an inquiry as aforesaid, is of the opinion that there is no sufficient evidence or reasonable ground for suspicion against such person, he shall release him on his executing a bond, with or without sureties, and shall direct such person to appear, as and when required, before the Special Judge, and make a report to the Special Judge for the discharge of such person and shall make a full report of the case to his immediate superior.

    (9) The Special Judge to whom a report has been made under sub-section, (8) may, after the perusal of record of the inquiry, and hearing the prosecution, agree with such report and discharge the accused or, if he is of the opinion that there is sufficient ground for proceedings against such person, proceed with his trial and direct the prosecution to produce evidence.

    (10) An officer of Inland Revenue empowered to hold inquiry under this section shall maintain a register to be called “Register of Arrests and Detentions” in the prescribed form in which he shall enter the name and other particulars of every person arrested under this Ordinance, together with the time and date of arrest, the details of the information received, the details of things, goods or documents, recovered from his custody, the name of the witnesses and the explanation, if any, given by him and the manner in which the inquiry has been conducted from day to day and, such register or authenticated copies of its aforesaid entries shall be produced before the Special Judge, whenever such Officer is so directed by him.

    (11) After completing the inquiry, an officer of Inland Revenue shall, as early as possible, submit to Special Judge a complaint in the same form and manner in which the officer in-charge of a police station submits a report, before a court.

    (12) Magistrate of the first class may record any statement or confession during inquiry under this Ordinance, in accordance with the provisions of section 164 of the Code of Criminal Procedure, 1898 (Act V of 1898).

    (13) Without prejudice to the foregoing provisions of this section, Board, with the approval of the Federal Minister-in-charge, may, by notification in the official Gazette, authorize any other officer working under the Board to exercise the powers and perform the functions of an officer of Inland Revenue under this section, subject to such conditions, if any, that it may deem fit to impose.

  • FBR surpasses revenue collection target for FY21

    FBR surpasses revenue collection target for FY21

    The Federal Board of Revenue (FBR), Pakistan’s premier tax collection agency, has surpassed its revenue collection target for the fiscal year 2020/2021.

    (more…)
  • Finance Act, 2021: Taxpayers given three months to update business bank accounts

    Finance Act, 2021: Taxpayers given three months to update business bank accounts

    ISLAMABAD: Declaring business bank accounts has become mandatory from July 01, 2021 otherwise a monetary penalty would be imposed. However, taxpayers have been given to update their registration profile along with business bank accounts up to September 30, 2021.

    According to the Finance Act, 2021 a new definition has been included in the Income Tax Ordinance, 2001 in which business bank account means a bank account utilized by the taxpayer for business transaction declared to the Commissioner through original or modified registration form prescribed under section 181.

    A Section 114A has been inserted through the Finance Act, 2021 under which every taxpayer will require to declare to the Commissioner the bank account utilized by the taxpayer for business transactions.

    Business bank account shall be declared through original or modified registration form prescribed under section 181.

    The Finance Act 2021 further imposed monetary penalty for not declaring the business bank account. Where any person fails to declare business bank account(s), in his registration application or fails to amend his registration profile to declare existing business bank account(s) willfully: Such person shall pay a penalty of Rs. 10,000 for each day of default since the date of submission of application for registration or date of opening of undeclared business bank account whichever is later:

    Provided that if penalty worked out as aforesaid is less than Rs.100,000 for each undeclared bank account, such person shall pay a penalty of Rs.100,000 for each undeclared business bank account:

    Provided further that this provision shall be applicable from the first day of October, 2021 during which period the taxpayer may update their registration forms.