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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.

  • FTO recommends disabling sales tax registration as soon application for de-registration received

    FTO recommends disabling sales tax registration as soon application for de-registration received

    ISLAMABAD: Federal Tax Ombudsman (FTO) has recommended disabling sales tax registration as soon application received for de-registration.

    The FTO submitted proposals for budget 2021/2022, stating that in order to stop misuse of registration for issuing fake invoices, immediate disabling of the registration was proposed in electronic system as soon as the application for de-registration was received.

    Sales Tax Registration of commercial importers was proposed to be allowed only to Income Tax filers along with other necessary cautions (i.e. declaration of Pakistan Customs Tariff (PCT) headings of the products they trade in) to check bogus registration.

     Following budget proposals were also sent to FBR:

    • to provide for immediate disabling of the registration in electronic system, pending final de-registration, as soon as the application for de-registration was received;

    • to prescribe a list of documents/records to accompany the de-registration applications for the purpose of sub-rule (2) of rule 11; and

    • suitable amendment to be made in rule 12(a)(vii) so that the Commissioner shall issue the orders of revocation of suspension within two weeks from the last date prescribed for issuance of show cause notice.

  • FBR transfers IR BS-20 officers

    FBR transfers IR BS-20 officers

    ISLAMABAD: Federal Board of Revenue (FBR) on Thursday notified transfers and postings of BS-20 officers of Inland Revenue Service (IRS).

    Following officers have been transferred:

    01.Tariq Hussain Sheikh (Inland Revenue Service/BS-20) has been transferred and posted as Chief, Federal Board of Revenue (Hq), Islamabad / Project Director (Track and Trace System / Video Analytic System), Federal Board of Revenue (HQ), Islamabad from the post of Chief, (ST & FE) Federal Board of Revenue (Hq), Islamabad.

    02. Muhammad Bilal Malik (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Appeals-IX), Lahore from the post of Additional Commissioner, Regional Tax Office, Lahore.

    03. Ms. Iram Shabbir (Inland Revenue Service/BS-20) has been transferred and posted as Director, Directorate General of Training & Research (Inland Revenue), Lahore from the post of Additional Commissioner, Regional Tax Office, Lahore.

    04. Javed Iqbal (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Enforcement-I) Corporate Tax Office, Karachi from the post of Additional Commissioner, Large Taxpayers Office, Karachi.

    05. Sajjad Amjad (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Sahiwal Zone) Regional Tax Office, Sahiwal from the post of Additional Director, Directorateof Intelligence & Investigation (Inland Revenue), Faisalabad.

    The FBR said that the officers who are drawing performance allowance prior to issuance of this notification shall continue to draw this allowance on the new place of posting.

  • FBR issues list of non-profit organizations eligible for tax credit

    FBR issues list of non-profit organizations eligible for tax credit

    ISLAMABAD: Federal Board of Revenue (FBR) has restricted the benefit of tax concession to 62 non-profit organizations (NPOs) under Tax Laws (Second Amendment) Ordinance, 2021.

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  • FBR needs Rs1,306 billion to achieve annual collection target

    FBR needs Rs1,306 billion to achieve annual collection target

    ISLAMABAD: Federal Board of Revenue (FBR) is required Rs1,306 billion during the last quarter (April-June) to achieve revised downward target of Rs4,700 billion set for the current fiscal year.

    According to provisional figures released by the FBR on Wednesday, the net collection was Rs3,394 billion during the first nine months (July – March) 2020/2021 as compared with Rs3,3,076  billion in the corresponding months of the last fiscal year, showing an increase of 10 percent.

    The collection in the first nine months of the current fiscal year has also exceeded by over Rs100 billion against the target of Rs3,287 billion set for the period.

    The original revenue collection target for the current fiscal year was set at Rs4,963 billion. However, sources in the FBR said that the target has been revised downward to Rs4,700 billion.

    Therefore, the FBR is required to collect more Rs1,306 billion in the remaining three months of the current fiscal year to achieve the target.

    According to a statement issued by the FBR, the net collection for the month of March 2021 was Rs.475 billion, against a required increase of Rs.367 billion, representing an increase of 46 percent over Rs.325 billion collected in March 2020 and 129 percent of the target.

    “The year-on-year growth of 46 percent is unprecedented. These figures would further improve before the close of the day and after book adjustments have been taken into account,” the FBR said.

    On the other hand, the gross collections increased from Rs.3,178 billion during this period last year to Rs.3,571 billion this year, showing an increase of 13 percent.

    The amount of refunds disbursed was Rs.177 billion compared to Rs.102 billion paid last year, showing an increase of 74 percent. This is reflective of FBR’s resolve to fast-track refunds to prevent liquidity shortages in the industry.

    The improved revenue performance is a reflection of growing economic activities in the country despite facing the challenge of third wave of COVID-19. During April-June 2021, it is expected that this revenue performance would be improved substantially compared to 2020 when economic activities were disrupted due to COVID.

    Meanwhile, FBR’s efforts to broaden the tax base are expending apace. Early signs suggest such efforts are bearing fruits. As on 28-2-2021, income tax returns for tax year 2020 have reached 2.8 million compared to 2.6 million last year, showing an increase of 8 percent. The tax deposited with returns was Rs.51 billion compared to only Rs.33.0 billion, showing an increase of 54 percent.

    It may be recalled that last year the final date for submission to returns was 28th February. FBR’s decision to adhere to 8th December as the last date has been vindicated as more returns and higher tax payments have been recorded during the tax year 2020 compared to 2019.

    Moreover, a number of 123,680 new Income Tax Returns have been received for Tax Year 2020 resulting into collection of additional tax of Rs. 511 million.

    Sales tax returns for the period from July 2020 to February 2021 have reached 179,584 whereas they were 167,769 in the corresponding months last year, showing an increase of 7.04 percent. The sales tax paid with returns is 624 billion this year which was 536 billion last year, showing an increase of 16.41 percent.

    FBR has also released the information about Tier-I retailers who have been integrated with POS system. According to the information, 10283 sales points have been integrated with Point of Sales Linked Invoicing System.

  • FTO proposes simplification of income tax return forms

    FTO proposes simplification of income tax return forms

    ISLAMABAD: Federal Tax Ombudsman (FTO) has advised the Federal Board of Revenue (FBR) to simplify income tax return forms in consultation with stakeholders to facilitate the taxpayers.

    In its proposals for the budget 2021/2022, the FTO recommended simplification of returns forms in consultations with small taxpayers along with availability of option of filing the returns in Urdu.

    Similarly, an option to file the returns manually with facility provided by the FBR to upload on line data was also proposed.

    The FBR in response to the FTO stated that simplified Income Tax Returns for salaried, small traders having turnover up to Rs10 million, manufacturing Small & Medium Enterprises (SME’s) having turnover up to Rs50 million have been issued.

    It was recommended that FBR should devise some system so that sunset date of filing return is not extended but late filing may be allowed with certain incremental penalty for delay in filing per month or any part of it.

    The FBR responded that in 2020, last date of December 08 was not extended. According to FBR, Income Tax Return making rules have been issued. Though these are applicable for Tax Year 2022 but FBR is following this for Tax Year 2021 and return forms would be available by 1st July (to be submitted within due date without extension on last date).

    The FTO proposed that FBR may approach the concerned Authorities/Establishment Division, to issue instructions to bind the heads of government departments, autonomous bodies and large scale public sector organizations to get the certificate of filing of returns by their employees falling in the tax net at the end of the last date and to link their promotion/annual increments with mandatory return filing.

    Regarding audit, it was proposed to rationalize its parameters so that more focus should be laid on large entities rather than small taxpayers.

    Moreover audits should also include investigative work to detect the evasion through a study of input/output standards of utility bills and production capacity of machinery etc. Several cases for audit should in line with capacity of FBR to complete the audit in a year.

  • PM praises FBR for achieving 41pc growth in March collection

    PM praises FBR for achieving 41pc growth in March collection

    ISLAMABAD: Prime Minister Imran Khan on Wednesday praised the Federal Board of Revenue (FBR) for posting an unprecedented growth of 41 percent in revenue collection for the month of March 2021.

    “I commend FBR efforts, achieving historic growth of 41 percent in March 2021 with collections recorded at Rs460 billion,” the prime minister said in a tweet message.

    The FBR collected around Rs322 billion in the same month of the last year.

    The FBR also posted 10 percent revenue collection growth to Rs3,380 billion during first nine months (July – March) of the current fiscal year.

    The FBR collected Rs3,060 billion in the corresponding months of the last fiscal year.

    “This reflects broad-based econ revival led by government policies,” the prime minister added.

  • FBR urged to remove CNIC condition on sales up to Rs100,000 by distributors

    FBR urged to remove CNIC condition on sales up to Rs100,000 by distributors

    KARACHI: Federal Board of Revenue (FBR) has been urged to withdraw condition of CNIC on supplies made by distributors to unregistered persons on sales up to Rs100,000.

    Karachi Chamber of Commerce and Industry (KCCI) in its proposals for budget 2021/2022 stated that under section 23(1)(b) of the Sales Tax Act, 1990 exclusion has been provided to retailers, whereby retailers supplying taxable goods to unregistered persons are not required to mention the CNIC unregistered customers, wherein the transaction value inclusive of sales tax does not exceed Rs.100,000.

    Due to the present provisions of the law, the distributors are facing a dilemma whereby small retailers are purchasing taxable goods valuing Rs.100,000 from mega stores (retailers) in order to avoid the requirement of providing the CNIC, resulting in loss of business for the Distributors who normally used to sell goods to such small retailers

    The KCCI proposed that FBR should extend similar exclusion of Rs.100,000 to distributors as well.

    Giving rationale, the KCCI said that it will help ease of doing business thereby resulting in enhancement of tax revenue.

  • FBR includes five export oriented associations for reduced power, gas tariff

    FBR includes five export oriented associations for reduced power, gas tariff

    ISLAMABAD: Federal Board of Revenue (FBR) has included five associations of export oriented sector (erstwhile zero-rated sector) in the concessionary tariff regime of electricity, RLNG and gas.

    The FBR issued Sales Tax Circular No. 01 of 2021 on Tuesday to include the members of five associations for providing concessionary tariff of electricity, RLNG and gas.

    The associations are included:

    (i) Pakistan Tanners Association (PTA)

    (ii) Pakistan Knitwear & Sweater Exporters Association (PAK-SEA)

    (iii) Towel Manufacturers’ Association of Pakistan (TMA)

    (iv) All Pakistan Bedsheets & Upholstery Manufacturers Association (APBUMA)

    (v) Pakistan Silk & Rayon Mills Association

    Previously, through Sales Tax Circular No. 04 dated December 30, 2020, the FBR notified following associations for referring their members for reduced tariff of electricity and gas:

    01. All Pakistan Textile Mills Association (APTMA)

    02. Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA)

    03. Pakistan Hosiery Manufacturers Association (PHMA)

    04. Pakistan Textile Exporters Association (PTEA)

    05. Pakistan Leather Garments Manufacturers & Exporters Association (PLGMEA)

    06. Pakistan Sports Goods Manufacturers & Exporters Association

    07. Surgical Instruments Manufacturing Association of Pakistan

    08. Pakistan Denim Manufacturers and Exporters Association

    09. All Pakistan Textile Processing Mills Association (APTPMA)

    The FBR issued standard operating procedure (SOP) to start the registration process.

    In a notification, the FBR said that the economic coordination committee of the cabinet had approved the reduced rate to manufacturers on supply of electricity and gas in a meeting held on December 12, 2020. The ECC also directed the FBR, ministry of commerce and other stakeholders to devise a standard operating procedure (SOP) for enrollment of registered persons under the export-oriented sectors (erstwhile zero-rated sectors) to quality concessionary regime of electricity, RLNG and gas tariff.

    Accordingly, a meeting was held in FBR on December 22, 2020 and as a result of thorough deliberations amongst all stakeholders the requisite SOP has been agreed upon and being rolled onto.

    The FBR said the following SOP adopted for enrollment of manufacturers for grant of reduced tariff rate:

    (i) For new registration of manufacturers for concessionary tariff rates, applicants may apply respective representative association.

    (ii) The Association concerned, after verifying the particulars on the prescribed format, may forward the application along with its element recommendations, duly signed by its chairman/president, to the export oriented sector registration cell (ESRC) of the FBR.

    (iii) The ESRC shall examine the particulars and recommendations of the respective associations and counter-verify particulars of the taxpayer including declarations in the registration profile etc. as required, and forward the case to the ministry of commerce for allowing concessionary tariff through respective Distribution Companies (DISCOs)/Gas companies.

    (iv) In case the ESRC spots any discrepancies in the verification report and data available with the FBR, the matter will be referred to Inland Revenue field formations for ground-check, report and recommendations.

    (v) The newly enrolled taxpayers shall be entitled to avail concessionary tariff prospectively.

    (vi) The DISCOs/gas companies shall ensure that the taxpayers are active on FBR’s (Sales Tax) Active Taxpayers List (ATL) as shared with DISCOs/gas companies each month before generating the monthly utility bills. In case the taxpayer is found non-active on the ATL, standard utility tariff shall apply on supply of utilities for the relevant period.

    (vii) Any taxpayer aspiring to avail concessionary utility rates and who is not registered with the respective sector association, may approach the Inland Revenue field formation concerned for verification of its business particulars and onward submission of report on the prescribed format to the RSRC within 15 days of the submission of the application.

    The procedure for the registration of new entrants in export oriented sectors shall become applicable with effect from January 01, 2021.

  • FBR offices to observe extended working hours for revenue collection

    FBR offices to observe extended working hours for revenue collection

    ISLAMABAD: In an effort to maximize revenue collection before the close of the fiscal quarter, the Federal Board of Revenue (FBR) has directed all Inland Revenue offices to observe extended working hours on Wednesday, March 31, 2021.

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  • FMCGs should be excluded from tax collecting agent

    FMCGs should be excluded from tax collecting agent

    KARACHI: Federal Board of Revenue (FBR) has been urged to amend laws to exclude manufacturers of fast moving consumer goods (FMCGs) from application of withholding tax under Section 236G and 236H on Income Tax Ordinance, 2001.

    Karachi Chamber of Commerce and Industry (KCCI) in its proposals for budget 2021/2022, stated that manufacturers of electronics, sugar, cement, iron and steel products, fertilizer, motorcycles, pesticides, cigarettes, glass, textile, beverages, paint or foam etc., collect advance tax at 0.1 percent for persons appearing on Active Taxpayers List (ATL) and 0.2 percent for non-ATL and 0.5 percent for ATL and 1 percent for non-ATL of gross of amount of sale to distributors, dealers, wholesalers and retailers.

    Most of the goods mentioned above are not fast moving consumer goods. The only FMCG is beverages on which the section 236 G & H are unjustly applied.

    This tantamount to discrimination for beverage manufacturers being the only manufacturer of FMCGs manufacturer class liable to above tax.

    It is not practically possible for manufacturer of FMCGs to collect income tax from dealers, distributors, wholesalers and retailers and it adds to the cost of consumer products.

    The KCCI proposed that the section may be appropriately amended to exclude the manufacturers of FMCGs from being collecting agents under section –236 G & H of the Ordinance.

    The chamber said that it would relieve the unjust burden of tax on consumer goods and enable manufacturers of FMCGs to pass the benefit to end-consumers.