The Federal Board of Revenue (FBR) has decided to expand its operations by establishing Anti-Benami Zones in four major cities across the country.
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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.
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Sajidullah Siddiqui transferred as Member IT
The Federal Board of Revenue (FBR) has announced the appointment of Sajidullah Siddiquie, a distinguished officer of the Inland Revenue Service (IRS) with the rank of BS-21, as the Member (IT) FBR.
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FBR urged to abolish withholding tax, minimum tax for commercial importers
KARACHI: Federal Board of Revenue (FBR) has been urged to abolish withholding tax and minimum tax for commercial importers in the upcoming budget 2021/2022.
Karachi Chamber of Commerce and Industry (KCCI) in its proposals for the upcoming budget said that commercial Importers of raw material pay withholding tax at 2 percent up to 5.5 percent which can only be possible if the gross profit is 30 percent, while the margin is not more than 2 to 3 percent on raw materials sold without value addition or change in form.
By amendment to Section 148 of Income Tax Ordinance, 2001 through Finance Bill 2018-19, WHT paid on import of raw materials by commercial importers has been converted to minimum tax and the importers have been taken out of fixed tax regime (FTR).
The chamber said that the concept of WHT is unique to Pakistan’s Tax regime which in fact is tantamount to putting the burden of tax-collection from undocumented entities on the compliant tax payers and avoiding the responsibility to broaden tax-base.
After acquiring unprecedented powers to access information under Section 56 A and 56 B in Income Tax Ordinance, 2001, FBR and its subordinate departments must take the responsibility to identify non-compliant and undocumented entities/persons instead of laying the onus on existing taxpayers.
The chamber proposed that concept of minimum tax and withholding tax may be abolished.
Tax Payers may be allowed to pay certain Fixed Tax or opt for Audit regime and pay taxes in accordance with actual tax liability on Income.
Furthermore, all Taxes deducted have to be adjustable against actual tax liability.
Giving rationale, the chamber said that the commercial importers who are a major source of revenue will be able to resume their business and contribute to revenue as well as promotion of SMEs.
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Real estate remains top priority for documentation of economy
ISLAMABAD: Tax authorities have prioritized real estate sector for documentation of economy during next three years for increasing share of direct taxes in revenues.
The Medium Term Budget Strategy Paper for 2021/2022 to 2023/2024 issued by the ministry of finance stated that all out efforts are being made to increase the share of direct taxes in revenues.
“Documentation of economy to increase the taxation in services, real estate and wholesale and retail is top priority,” it added.
According to the paper the use of information technology is the corner stone of strategy of Federal Board of Revenue (FBR) for mobilization of revenues.
It aims at automation of all business processes starting from registration to assessment and issuance of refunds.
Installation of the ‘Track and Trace’ system, point of sale integration of retailers with FBR’s computerized system, e-audit and e-appeals are at various stages of implementation and would be fully operational in the medium term.
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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.
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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.
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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
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
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.
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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.