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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.

  • KTBA recommends daily update of ATL file; banks not relying on online verification

    KTBA recommends daily update of ATL file; banks not relying on online verification

    KARACHI: Karachi Tax Bar Association (KTBA) has advised the Federal Board of Revenue (FBR) to update Active Taxpayers List (ATL) on daily basis instead weekly as banks were not relying on the online verification of the active taxpayers for purpose of withholding tax deduction.

    The KTBA on Saturday said that many taxpayers are making payment of surcharge U/s.182A of the Income Tax Ordinance, 2001 (Ordinance) for inclusion of their names in the ATL and upon the payment the status of taxpayer is immediately updated in the ATL on the web portal.

    However, the excel file available on the FBR web portal of is not being updated which is causing severe problems to the taxpayers as far as withdrawals from banks are concerned.

    “The banks are not relying on the online verification available on the web portal of FBR,” the KTBA said.

    The KTBA suggested that the excel file (lists) available on the web portal of FBR is updated on daily basis and the banks are also informed to rely on the online verification before withholding deducting the tax on banking transactions in order to facilitate the taxpayers.

    The tax bar said that it had received many complaints that where manual extensions were filed/submitted and where no reply was received (whether granted or refused) and the returns were filed within the time applied for; the names of such taxpayers are also not appearing in the ATL though such cases are liable to be treated as filed within the time allowed.

    The KTBA advised that where taxpayers have filed the manual extensions within time and where the returns have been filed within the time applied for, the names of such taxpayers should be included in the ATL and the ATL be updated immediately without payment of surcharge as prescribed U/s.182A of the Ordinance.

    There are several instances where the taxpayers have opted rightly to file their returns, in time, manually (paper returns) as they were legally not bound to file their returns electronically, their names are also not appearing in the ATL for which we are being informed by our members continuously. We feel that the manual returns have not been digitized and such taxpayers are facing severe problems due to non-appearance of their names in the ATL.

    The tax bar suggested that where taxpayers have rightly filed/submitted their returns manually (paper turns), the names of such taxpayers should be included in the ATL forthwith for their facilitation.

    The KTBA also received complaints from members and have also noticed that there are instances where extension applications have been submitted via IRIS within time and the same are appearing in the outbox of IRIS unattended by the concerned Commissioners and the returns have also been filed within the time applied for but their names are not appearing in the ATL.

    The tax bar said that there is no fault of the taxpayers who have filed the extensions in time that remains unattended and the returns have also been filed within the time applied for.

    It suggested that where taxpayers have applied for extensions on IRIS in time, whose applications have remained unattended and the returns have been filed within the time, the names of such taxpayers should also be included in the ATL forthwith for their facilitation

  • FBR signs contract to launch track and trace system from July 01

    FBR signs contract to launch track and trace system from July 01

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday signed a contract with AJCL along with its lead partner Authentix Inc. USA and Mitas Corporation of South Africa to operationalize Track and Trace Solution on Tobacco, Cement, Sugar and Fertilizer Sectors.

    Dr. Muhammad Ashfaq Ahmed, Member (IR-Operations), FBR, Kevin McKenna, CEO, Authentix, Sten Bertelsen, from Mitas Corporation and Omer Jaffer CEO of AJCL signed the Contract on behalf of their respective organizations.

    The track and trace Solution is scheduled to be rolled out across the tobacco, cement, sugar and fertilizer sectors from July 01, 2021 in Pakistan.

    This system will enhance tax revenue, reducing counterfeiting and prevention of smuggling of illicit goods.

    Track and Trace involves implementation of a robust, nationwide, electronic monitoring system of production volumes by affixation of more than 5 billion tax stamps on various products at the production stage, which will enable FBR to track the goods throughout the supply chain.

    Dr. Muhammad Ashfaq Ahmed, Member (IR-Operations), FBR on the occasion said that FBR shall be working closely with AJCL Consortium during the rollout of the program across different industries on very aggressive timelines.

    Kevin McKenna of Authentix stated that the program would help provide a transformational boost to the local economy, enhance revenue and make the tax collection process more transparent.

    CEO AJCL, remarked that the Consortium was looking forward to working with FBR to configure and implement the various components of the solution.

    Around 45million tons of cement, more than 4 billion sticks of tobacco cigarettes, more than 4million tons of sugar and more than 30 million tons of fertilizer would be brought into the tax net.

    This will enhance digitization of economic activity, improve revenue forecasting and curb counterfeit products in the market.

  • Large number of taxpayers denied active status

    Large number of taxpayers denied active status

    ISLAMABAD: Pakistan Tax Bar Association (PTBA) has informed the Federal Board of Revenue (FBR) that a large number of taxpayers who have file returns but their names are not on the new Active Taxpayers List (ATL), which was issued on March 01, 2021 for tax year 2020.

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  • FBR notifies Chairman of Benami Adjudicating Authority

    FBR notifies Chairman of Benami Adjudicating Authority

    ISLAMABAD: The government has appointed Dr. Muhammad Ali Khan as chairman of Benami Adjudicating Authority under the Benami Transactions (Prohibition) Act, 2017.

    The Federal Board of Revenue (FBR) on Wednesday issued the notification for the posting. Dr. Muhammad Ali Khan, is a BS-22 officer of Inland Revenue Service (IRS) and was posted as Member (Admin Pool), FBR HQ Islamabad.

    The FBR also notified the posting of Dr. Bashirullah Khan, a BS-21 officer of IRS as Member, Benami Adjudicating Authority, under the Benami Transactions (Prohibition) Act, 2017.

    Dr. Bashirullah khan has been transferred from the post of Directorate General of Intelligence and Investigation (IR), Islamabad.

  • FBR starts harmonizing Inland Revenue codes to simplify tax laws

    FBR starts harmonizing Inland Revenue codes to simplify tax laws

    ISLAMABAD: Federal Board of Revenue (FBR) has started harmonizing Inland Revenue codes in order to simplify and consolidate the tax laws, sources said on Wednesday.

    The harmonization of IR codes has been started under World Bank funded ‘Pakistan Raises Revenue Project’.  The FBR said that it had received financing from the World Bank towards the cost of the Pakistan Raises Revenue Project, and intended to apply part of the proceeds for consulting services.

    The FBR said the government of Pakistan is implementing a reforms program to mobilize domestic revenues to finance its development vision.

    This program is being financially supported by the World Bank through a Pakistan Raises Revenue Project (PRRP). The overall objective of the Project is to “contribute to a sustainable increase in domestic revenue by broadening the tax base and facilitating compliance”. The duration of the implementation of project is five-years (2020-2024).

    The FBR, with support from the World Bank, is currently undertaking a project for harmonization of the existing tax laws administered by the Inland Revenue Service of the Board, including but not limited to the Sales Tax Act, 1990, Income Tax Ordinance, 2001, the Islamabad Capital Territory (Sales Tax on Services) Ordinance 2001, the Capital Value Tax levied under Section 7 of the Finance Act 1989 and the Federal Excise Act, 2005 with the objective to harmonize the existing laws to the extent possible in order to provide ease of compliance and implementation and to bring certainty into their application.

    Inland Revenue Service working under the FBR is responsible for administering tax laws pertaining to levy, assessment and collection of all Federal Inland Taxes.

    Over the years, a harmonization process for the three main Inland Revenue laws, i.e. Sales Tax Act, 1990, Income Tax Ordinance, 2001, the Islamabad Capital Territory (Sales Tax on Services) Ordinance 2001, the Capital Value Tax levied under Section 7 of the Finance Act 1989 and the Federal Excise Act, 2005 has continued in order to align the provisions of the four enactments with each other and to provide uniformity and ease of implementation/compliance for the tax collectors and the taxpayers.

    The next milestone in the on-going reforms and continuance of the process of streamlining of Inland Taxes is the transition to a harmonized Inland Revenue Code by integrating the existing four laws.

    Consulting services are required for drafting of the harmonized Inland Revenue Code including legislative drafting along with stakeholder consultation.

    The administrative and machinery provisions will be common for all the three tax laws. This component of the proposed Code would include provisions relating to record keeping, registration and returns, audits and investigations, tax arrears, penalties (both civil and- criminal) for a taxpayer’s failure to comply with his obligations, recovery of monies owed to the government, internal investigations, the legal rights of taxpayers (including appeals), redress processes and dispute settlement.

    On the other hand, the charging and substantive provisions will be unique for each tax in conformity with their distinguishable character and essence. In addition to reorganization of the existing legal provisions, the exercise will provide an opportunity to simplify and consolidate the tax laws where the laws have become cumbersome and complex.

    This initiative will reflect aspirations of taxpayers to have a simple tax law, provide ease of doing business, meet the demands of both bilateral and multilateral development partners, as well as vividly crystallize the government’s vision of a fresh-look tax system.

    The foregoing factors demand initiating the process of writing of a harmonized Inland Revenue Code as early as possible so that it can be publicized for general feedback and comments before becoming the part of the next Finance Bill.

    FBR seeks the services of a consulting firm, which shall lead all aspects of the assignment of drafting the new legislation.

    The Assignment has the following components:

    (a) To review existing analytical work and recommendations from government’s and development partners’ initiatives from recent past;

    (b) to engage in a structured consultative process with the management of the Board, to comprehend overall vision and objectives for this assignment, and to design a roadmap for achieving the desired objectives;

    (c) to structure the drafts in a manner that it has common administrative/machinery provisions for all tax types and separate charging/substantive provisions for each tax type;

    (d) to discuss and analyze the implications of the recommended unified tax code for the organizational structure of the FBR and IRS;

    (e) to prepare and submit the draft legislation to the Board for its review and approval;

    (f) to conduct stakeholders’ consultations, including FBR field offices, the taxpayers’ association or similar organizations, and incorporate their views, before submitting the drafts for legislative processing.

    (g) to assist the FBR in the legislative process by attending the meetings of the Parliamentary Committees, if so, required by the FBR; and

    (h) to work with FBR to design and conduct communication and awareness campaigns (internal and external), after the promulgation of the legislation.

    The FBR has invited Expression of Interest (EOI) from consulting firms by March 05, 2021.

  • E-intermediary defined by Income Tax Rules

    E-intermediary defined by Income Tax Rules

    E-intermediary is explained as a person or a firm appointed on behalf of another person or a firm to get the job done.

    The Income Tax Rules, 2002 updated up to September 08, 2020 issued by the Federal Board of Revenue (FBR) explained “e-intermediary” as a person registered as,-

    (i) Chartered Accountant with the Institute of Chartered Accountants of Pakistan;

    (ii) Cost and Management Accountant with the Institute of Cost and Management Accountants of Pakistan;

    (iii) a legal practitioner entitled to practice in any Court in Pakistan;

    (iv) a member of the Association of Chartered Certified Accountants, UK; or

    (v) an Income Tax Practitioners, registered with Tax Bar affiliated with All Pakistan Tax Bar Association.

  • Taxpayers may get active status after surcharge payment: FBR

    Taxpayers may get active status after surcharge payment: FBR

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday advised late filers to pay surcharge to appear on the Active Taxpayers List (ATL) for tax year 2020.

    The FBR a day earlier issued the ATL for tax year 2020. The total number of active taxpayers for the tax year 2020 is 2.18 million. However, according to the FBR received 2.63 million income tax returns for the tax year under review.

    The FBR said that about 0.59 million are those taxpayers who filed their returns after due date. So their names are not on the ATL 2020.

    “These late filers are not included in the ATL as they have not paid surcharge,” the FBR said, adding that those taxpayers can get ATL status after paying surcharge.

    The amount of surcharge for appearance on the ATL is Rs20,000 for corporate entity, Rs10,000 for Association of Persons (AOP) and Rs1,000 for individuals.

    The FBR said those who have not filed their annual returns for tax year 2020 they can file their returns now and avail benefits of the ATL.

    The ATL ensures exemption of withholding tax to return filers on various transactions. Further, it also allows return filers to avail reduced rate of withholding tax on many other transactions.

  • Pre-arrival customs clearance rolled out to five airlines

    Pre-arrival customs clearance rolled out to five airlines

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday said that it has extended the pre-arrival custom clearance facility to five airlines.

    A FBR spokesman on a pilot project on customs clearance in the Sky that was started with Qatar Airways has now been rolled out to five other airlines.

    Urgent shipments on Turkish Airlines, Fly Dubai, Air Arabia and YTO cargo are being processed through customs risk management system hours before flight arrival at Karachi Airport.

    Pakistan Customs has introduced a pre-arrival clearance facility last month under its flagship pilot project ‘Clearance in the Sky’ at Model Customs Collectorate (MCC), Jinnah International Airport (JIAP) Karachi.

    The cargo manifest is filed in advance immediately after the take-off of the flight from the origin. The advance feeding of manifest allows the traders and their customs clearing agents to file their goods declarations to the customs.

    The declarations filed in advance are checked through the risk management system. An electronic message on the release status is sent to the traders while the goods are still in the air.

  • I&I IR to gather information of suspicious financial transactions

    I&I IR to gather information of suspicious financial transactions

    ISLAMABAD: The Directorate General of Intelligence and Investigation (I&I) of Inland Revenue has been empowered to gather information about suspicious financial transactions, including investment and expenses.

    The Federal Board of Revenue (FBR) on Tuesday issued SRO 272(I)/2021 to authorized the directorate for making various activities to identify income tax evasion.

    The functions of the Directorate-General of Intelligence and Investigation, Inland Revenue shall be:

    — To carry out intelligence activities, access and verification of business premises, access to record/documents or system maintained therein, intelligence gathering on all tax related issues including under-reporting, tax evasion and revenue leakages.

    — To collect information/record/documents from any person including taxpayer and third party-relating to financial transactions like investment and expenses etc. and details of persons who are involved in such activities.

    — To process information and take necessary action on the basis of information provided by any other organization, agency or department under the relevant provisions of Income Tax Ordinance, 2001.

    — To utilize the information obtained through establishment of linkages by the FBR with all major national, provincial other data bases to collect relevant information.

    — To identify cases of income tax evasion and carry out inquiry, investigation, whichever is deemed fit, to retrieve the loss of revenue; to identify, investigate and prosecute cases of tax evasion and/or offences punishable under the Income Tax Ordinance, 2001 and the rules made thereunder.

    — To share and disseminate actionable information and corroborating evidence, where required, through written reports or information reports or otherwise to authorities or officers in the headquarters and field formations of the FBR for further proceedings.

    — To process, investigate and prosecute complaints of tax evasion.

    — To process, investigate and prosecute information shared by other agencies.

    — To carry out any other work or function that may be assigned to it by the FBR.

  • FBR devises mechanism for release of consignments stuck-up at Karachi ports

    FBR devises mechanism for release of consignments stuck-up at Karachi ports

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday devised a mechanism for release of imported goods of FATA/PATA residents stuck-up at Karachi ports.

    A meeting was held under the Chairmanship of the FBR chairman with Inland Revenue-Operations and Customs Operations Wings to sort out the issues of imported goods of FATA/PATA residents stuck-up at Karachi Ports, Consumption/Installation Certificates, Postdated Cheques and Exemption Certificates under Section 148 of the Income Tax Ordinance, 2021.

    After thorough deliberations between the Chairman, Member (IR-Operations) and  Member (Customs-Operations) following mechanism was devised for the release of consignments of FATA/PATA residents stuck-up at the Karachi Ports:-

    The stuck-up containers are to be released by Customs authorities against Postdated Cheques (PDCs) and sent to their destination (FATA/PATA) under standard tracker mechanism.

    The Collector Customs (Enforcement & Compliance), Peshawar, will issue detention orders of the raw materials effective from day the consignment reaches the manufacturing premise of importers.

    The importer/manufacturer will be responsible to take the import documents alongwith detention order to the CIR concerned, RTO, Peshawar and make arrangements to have the manufacturing premises/raw material/machinery/goods imported verified.

    The CIR concerned, RTO, Peshawar will be liable to verify/undertake physical visit as conducted by the importer/manufacturer to the manufacturing premises where the goods are kept under detention, and allow the raw material to be consumed/utilized in writing.

    The CIR, concerned, RTO, Peshawar will ensure the monthly stock-taking of the raw materials to consumed in the production of manufactured goods by these manufacturing units. This stock-taking will facilitate in issuance of the

    Consumption Certificate under S.No.151 of the Sixth Schedule of the Sales Tax Act, 1990.

    The residents of FATA/PATA will apply for tax exemption certificates under section 159 of the Income Tax Ordinance, 2001 for the import of raw material/machinery in light of the Honorable Peshawar High Court, Mingora Bench, (Dara-ul-Qaza), Swat’s decision dated 24.11.2020.

    Commissioner Corporate, RTO, Peshawar and Collector Customs (Enforcement & Compliance), Peshawar would keep a close liaison to successfully implement the laid down mechanism.