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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.

  • 400,000 taxpayers pay surcharge for ATL

    400,000 taxpayers pay surcharge for ATL

    KARACHI: Around 400,000 taxpayers have paid surcharge for appearance on Active Taxpayers List (ATL) for tax year 2020, according to updated active taxpayers list issued on Monday by the Federal Board of Revenue (FBR).

    The FBR issues a fresh ATL on March 01 every year on the basis of returns filed for the preceding tax year. The FBR issued ATL for tax year 2020 on March 01, 2021. This ATL carried 2.17 million names of taxpayers who filed their income tax returns by due date or those who filed their returns on the date which was extended by Commissioner Inland Revenue (CIR).

    The updated ATL – on the basis of surcharge paid by those person who filed their income tax returns after due date – is showing around 2.57 million names of active taxpayers.

    The filing of income tax returns is mandatory for all the taxpayers who have taxable income or specified under Section 114 of Income Tax Ordinance, 2001.

    As per statute the compliance of mandatory return filing was not enough to avail the reduced rate facility. According to Section 182A of Income Tax Ordinance, 2001 the persons who fail to file annual return of income by due date or extended by commissioner Inland Revenue then their names would not be included in the active taxpayers list for the year for which return was not filed.

    However, the persons would be included in the taxpayers list on filing return after the due date, if they pay surcharge at: Rs20,000 in case of  a company; Rs10,000 in case of an association of persons; and Rs1,000 in case of an individual.

  • Tax collection on profit from bank deposits increase to Rs54.55bn in July – March

    Tax collection on profit from bank deposits increase to Rs54.55bn in July – March

    KARACHI: Withholding income tax collection from profit on bank deposits registered 11 percent growth to Rs54.55 billion during first nine months (July – March) 2020/2021, sources said on Monday.

    The collection of withholding tax from profit on bank deposits was Rs49 billion in the nine months of the last fiscal year, officials at Regional Tax Office (RTO) –I Karachi said.

    The RTO-I Karachi, is a revenue collection arm of the Federal Board of Revenue (FBR), has mandate to collect the withholding tax on profit from debt on bank deposits under Section 151 of the Income Tax Ordinance, 2001.

    The rate of tax to be deduction under section is 15 percent of the yield or profit. In case person is not on the Active Taxpayers List (ATL) the tax rate shall be increased by 100 percent.

    The officials attributed the rise in tax collection to massive increase in bank deposits.

    The bank deposits have reached to record high at Rs17.9 trillion by end of March 2021. The deposits of banking system increased by 18.38 percent as the total deposits were at Rs15.12 trillion by end March 2020.

  • Major reforms in personal income tax likely in budget

    Major reforms in personal income tax likely in budget

    ISLAMABAD: The tax authorities are working on major reforms in personal income tax to be introduced through budget 2021/2022.

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  • FBR issues alert against fake, harmful emails

    FBR issues alert against fake, harmful emails

    The Federal Board of Revenue (FBR) has issued a cautionary alert to the general public, urging them to be vigilant against harmful and fake emails circulating under the guise of official communications.

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  • FBR urged to revise slabs for advance tax collection on motor cars

    FBR urged to revise slabs for advance tax collection on motor cars

    KARACHI: Federal Board of Revenue (FBR) has been urged to revise slabs of engine capacity of motor cars to give benefit to buyers in payment of withholding tax.

    Overseas Investors Chamber of Commerce and Industry (OICCI) in its proposals for budget 2021/2022 submitted to the FBR, said that advance tax under section 231B of Income Tax Ordinance, 2001 is collected by manufacturers on following categories:

    On engine capacity 1001cc to 1300cc the advance tax is collected at Rs25,000.

    While on engine capacity 1301 cc to 1600cc the advance tax is collected at Rs50,000.

    OICCI recommended that as locally manufactured sedans passenger cars fall slightly above the 1300cc category the slightly higher engine capacity size results in these vehicles falling in higher tax bracket making it more expensive with higher upfront cost to customers.

    Amendment should be made in the categories of vehicles mentioned in Division VII of Part IV of First Schedule as follows:

    On engine capacity 1001cc to 1350cc the advance tax rate should be Rs25,000.

    While on engine capacity 1351 cc to 1600cc the advance tax rate should be Rs50,000.

    In its proposals for auto sector, the OICCI recommended that minimum tax rate should be reduced to 0.2 percent for authorized dealers of local vehicle manufacturers as they have high turnover and low margins.

    The OICCI further said that exempt imports made under SRO 655(I)/2006 & SRO 656(I)/2006 from ACD levied vide SRO 1178 (I) 2015 and enhanced vide SROs 630 (I)/2018 and 670 (I)/2019.

    Federal Excise Duty (FED) on locally manufactured vehicles should be withdrawn.

    Levy of FED on locally manufactured vehicles be withdrawn by deleting the serial no. 55B of Table I of First Schedule to the Federal Excise Act, 2005 as it has resulted in significant increase of sales price of vehicles with consequential reduction in sales volume of the respective vehicle categories.

  • Only FBR registered cigarette brands to be sold in Pakistan: Member IR Operation

    Only FBR registered cigarette brands to be sold in Pakistan: Member IR Operation

    ISLAMABAD: Dr. Muhammad Ashfaq Ahmed, Member (Inland Revenue Operations) has said that authorities were in process of drafting new rules where-under cigarette brands registered with FBR could only be sold in Pakistani markets.

    He said during his visit to Regional Tax Office (RTO) Rawalpindi on Friday where the tax office had seized two trucks which were illegally transporting non-tax paid counterfeit cigarettes for supply into local market.

    The Member said that from July 1, 2021, Track & Trace System would be rolled out to cover tobacco manufacturing across the country, and that AJK Government had approached Federal Board of Revenue to extend the scope of Track & Track System to cigarette manufacturing units located inside AJK territory.

    It is expected that over the next few months implementation of Track & Trace System and its extension into AJK, coupled with IREN’s valiant drive would help overcome the menace of counterfeit, illicit and non-tax paid cigarettes in the market.

    Dr. Muhammad Ashfaq Ahmed appreciated Dr. Khalid Mahmood Lodhi, Chief Commissioner, RTO, Rawalpindi and his enforcement drive to curb movement of illicit cigarettes on the roads. He also announced special reward for the members of the raiding squad and encouraged them to continue working with full commitment and integrity.

    According to details the trucks were loaded with 300 cartons of counterfeit cigarettes of Classic Brand, and 300 cartons of counterfeit cigarettes of Kissan Brand containing 6 million cigarette sticks. Market value of the seized cigarettes comes to Rs. 18,900,000/- involving unpaid duties and taxes at Rs. 12,646,500/-. Some of the counterfeit cigarette brands are manufactured in AJK, and then transported across into Pakistani markets without payment of duty and taxes.

  • World Bank, FBR discuss $400 million reform program

    World Bank, FBR discuss $400 million reform program

    ISLAMABAD: The World Bank and Federal Board of Revenue (FBR) on Friday discussed reform program worth $400 million, which is aimed at automation of tax collection and simplification of tax compliance.

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  • FBR reinstates customs officials of Peshawar collectorate

    FBR reinstates customs officials of Peshawar collectorate

    ISLAMABAD: Federal Board of Revenue (FBR) on Thursday reinstated six customs officials into services, who were suspended for violating government service rules.

    The following BS-16 officers of Model Customs Collectorate (Enforcement and Compliance), Peshawar, who were placed under suspension dated August 11, 2020 have been reinstated into services with immediate effect and until further orders:

    1. Mazhar Elahi, Superintendent, MCC, (E&C), Peshawar

    2. Syed Nazim Ali Shah, Inspector, MCC, (E&C), Peshawar

    3. Afaaq Hussain, Inspector, MCC, (E&C), Peshawar

    4. Shah Fahad, Inspector, MCC, (E&C), Peshawar

    5. Zafar Ali, Inspector, MCC, (E&C), Peshawar

    6. Farhad Khan, Inspector MCC, (E&C), Peshawar

    The FBR said that suspension period from 11.08.2020 to-date is treated as spent on duty.

  • FBR collects Rs1.8bn advance tax on capital gains from sale of securities

    FBR collects Rs1.8bn advance tax on capital gains from sale of securities

    KARACHI: Federal Board of Revenue (FBR) has collected Rs1.8 billion as advance tax on capital gains from sale of securities during first nine months of the current fiscal year.

    According to statistics made available on Thursday, the Large Taxpayers Office (LTO) Karachi collected Rs1.8 billion during July – March 2020/2021 as compared with Rs1.63 billion in the corresponding period of the last fiscal year, showing an increase of 10 percent.

    The FBR collects adjustable advance tax on capital gain from sale of securities under Section 147(5B) of the Income Tax Ordinance, 2001.

    The rate of advance tax is two percent of the capital gains derived during the quarter, where holding period of a security is less than six months.

    The rate of advance tax is 1.5 percent of the capital gains derived during the quarter, where holding period of a security is more than six months but less than twelve months.

    The collection of advance tax on capital gains from sale of securities fell sharply by 96 percent to Rs11.24 million when compared with Rs269 million in the same month of the last year.

  • Harmonization of sales tax to complete by June

    Harmonization of sales tax to complete by June

    ISLAMABAD: Harmonization of sales tax between federal and provincial tax authorities may be completed by end-June 2021, officials in the Federal Board of Revenue (FBR) said on Wednesday.

    The FBR said that the authorities were in the process of harmonizing the service sales tax across provincial jurisdictions, with support from the World Bank, which will be completed by end-June 2021.

    The officials said that the government had shown commitment to the International Monetary Fund (IMF) of taking several measures including broadening of sales tax base.

    The government has committed to reforms the General Sales Tax (GST) system, underpinned by a unified tax base and within the confines of the current constitution.

    The authorities will: (i) eliminate all zero-rated goods (Fifth Schedule), except on export and capital machinery goods and move them to the standard sales tax rate; (ii) remove reduced rates under the Eight Schedule and bring all those goods to the standard sales tax rate; (iii) eliminate exemptions (Sixth Schedule) excluding a small subset of goods (i.e., basic food, medicines, live animals for human consumption, education and health-related goods) and bring all others to the standard rate; and (iv) remove the Ninth Schedule to replace a specific tax rate for cell phones with the standard rate.

    These reforms are expected to yield an estimated 0.7 percent of GDP on an annualized basis.

    Moreover, the authorities are also in the process of harmonizing the service sales tax across provincial jurisdictions, with support from the World Bank, expected to be completed by end-June 2021.