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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.

  • FBR decides punitive action against non-filer companies, individuals

    FBR decides punitive action against non-filer companies, individuals

    ISLAMABAD: Federal Board of Revenue (FBR) has decided to take punitive measures against corporate entities for not filing income tax returns.

    The FBR on Wednesday said that over 100,000 companies are registered with Securities and Exchange Commission of Pakistan (SECP) but above 50,000 are not filing returns.

    Under Section 114 of the Income Tax Ordinance, 2001 it is mandatory for every registered company to file income tax return.

    The FBR has identified different segments of persons/companies who are required to file income tax returns but are not making compliance with tax laws. “Such people will be brought in the tax net to reduce the burden of honest taxpayers,” the FBR said.

    The FBR detected that one million filers claiming to have non-taxable income but evidence to the contrary exists with the main database.

    Further, more than 3.5 million holders of National Tax Numbers (NTNs) are not filing return despite mandatory requirement under the law.

    Another 7.4 million individuals whose withholding tax is being deducted, but they fail to file return as required under the law.

    The FBR said that 105,000 holders of Sales Tax Registration Number (STRN) are also not filing income tax return despite mandatory requirement of the law.

    “All persons/companies having taxable income are advised to file returns and avoid punitive consequence,” according to the FBR.

    The last date for filing income tax return for tax year 2020 is December 08, 2020.

  • FBR bars creation of new units to resolve HR shortage

    FBR bars creation of new units to resolve HR shortage

    ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday restrained tax offices from creating new units/ranges for resolving shortage of human resource.

    A circular issued by the FBR stated that a meeting of Inland revenue-Operations and Admin Wings of FBR was held on November 04, 2020 in which various requirements of IR field formations were discussed.

    It was observed that field formations had increased the number of units and ranges without taking into consideration the notified sanctioned strength of the field offices.

    “Needless to say, with increase of just one extra unit, there raises a requirement of support and technical staff, this leads to an unending shortage of human resource for the organization,” it added.

    The FBR directed the tax offices to avoid creating new unit/range unless prior approval of the board is obtained.

    The FBR also directed all the chief commissioners to share details of existing units and ranges to enable the tax authorities to notify the sanctioned strength.

  • KTBA expresses concerns over delay in form issuance for taxpayer profile update

    KTBA expresses concerns over delay in form issuance for taxpayer profile update

    KARACHI: Tax practitioners on Tuesday expressed serious concern over delay by Federal Board of Revenue (FBR) in issuing forms for mandatory profile update by taxpayers.

    Karachi Tax Bar Association (KTBA) in a letter sent to Member Inland Revenue Operations discussed the delay by the FBR in issuing forms for mandatory profile update by taxpayers.

    The KTBA said that Section 114A of the Income Tax Ordinance, 2001 was introduced through Finance Act, 2020.

    The profile update has been made mandatory for taxpayers to electronically update certain information including bank accounts, utility connections, details of business premises etc.

    The deadline for electronically filing the taxpayers profile form in case of persons already registered before September 30, 2020 is on or before December 31, 2020. In case of a person registered after September 30, 2020 the registration must be within 90 days of the registration.

    Further, failure to file the form would not only entail punitive penalty but the taxpayers would also be excluded from the Active Taxpayers List (ATL).

    Till today the form as required to be filed under Section 114A has not been prescribed let alone its availability on IRIS.

    The KTBA pointed out the gravity of the situation, as updating the profiles of almost 2.5 million taxpayers and that too with the comprehensive information is a stupendous and time consuming exercise for the counsels of the taxpayers and that too at the time when the counsels of the taxpayers are engrossed in filing the tax returns as well as wealth statements, the last date of which is falling due on December 08, 2020.

    It is a must exercise to be undertaken like in any developed tax regime in the world, yet the non-availability of prescribed forms and the facility of the same on IRIS is highly unexpected and rather damaging. “The is coupled with the fact that with limited functionality on IRIS in these times of return filing, it is feared that IRIS may malfunction disrupting the timelines to be adhered for filing the income tax return and updation of taxpayer’s profile together.”

    The KTBA urged Member IR Operations to immediately take measures to prescribed the form as required under Section 114A of the Ordinance and also give directions to provide the same in IRIS for updation of taxpayer’s profile with the directions to field offices not to issue penalty notices as the delay is not on part of the taxpayers.

  • Rate of advance income tax on education fee

    Rate of advance income tax on education fee

    ISLAMABAD: Federal Board of Revenue (FBR) has updated rate of advance income tax to be collected by educational at the time of preparing fee challan during tax year 2021 (July 01, 2020 to June 30, 2021).

    The FBR issued Income Tax Ordinance, 2001 (updated up to June 30, 2020) after incorporating amendments brought through Finance Act, 2020.

    The FBR updated the rate of collection of tax under section 236I of Income Tax Ordinance, 2001, which shall be 5 percent of the amount of fee.

    Following is the text of Section 236I under which the advance tax to be collected by educational institutions:

    236I. Collection of advance tax by educational institutions.— (1) There shall be collected advance tax from a person not appearing on the active taxpayers’ list at the rate specified in Division XVI of Part-IV of the First Schedule on the amount of fee paid to an educational institution.

    (2) The person preparing fee voucher or challan shall charge advance tax under sub-section (1) in the manner the fee is charged.

    (3) Advance tax under this section shall not be collected from a person on an amount which is paid by way of scholarship or where annual fee does not exceed two hundred thousand rupees.

    (4) The term “fee” includes, tuition fee and all charges received by the educational institution, by whatever name called, excluding the amount which is refundable.

    (5) Tax collected under this section shall be adjustable against the tax liability of either of the parents or guardian making payment of the fee.

    (6) Advance tax under this section shall not be collected from a person who is a non-resident and,—

    (i) furnishes copy of passport as an evidence to the educational institution that during previous tax year, his stay in Pakistan was less than one hundred eighty-three days;

    (ii) furnishes a certificate that he has no Pakistan-source income; and

    (iii) the fee is remitted directly from abroad through normal banking channels to the bank account of the educational institution.

  • FBR advises taxpayers not to share financial information to fraudulent SMS

    FBR advises taxpayers not to share financial information to fraudulent SMS

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday advised taxpayers not to share their information of credit cards, banks and other financial accounts to fake and fraudulent SMS.

    “FBR does not send SMS to the taxpayers requesting for calling on specific numbers and asking for PIN numbers, passwords or similar access information for credit cards, banks or other financial accounts,” the FBR said.

    There are numerous attempts by individuals & groups to solicit personal information from unsuspecting users by employing social engineering techniques.

    Various SMS are crafted to appear as if they have been sent from a legitimate organization or known individual.

    These SMS often attempt to entice users to call at specific mobile numbers and are asked to provide personal information, such as account usernames and passwords, which can further expose them to future compromises.

    FBR never sends SMS on the taxpayer mobile numbers to obtain taxpayer’s banking information in lieu of facilitating a refund to the taxpayer or any other activity associated with an individual’s bank account are extremely dangerous with an intent to defraud the individual.

    FBR strictly advises the taxpayer from calling on the mobile number specified in the SMS and disclosing any information especially related to your bank accounts.

  • FBR warns return filers against incorrect information

    FBR warns return filers against incorrect information

    ISLAMABAD: Federal Board of Revenue (FBR) has warned individuals, who are return filers, against harsh action for providing incorrect information of taxable income.

    The FBR on Tuesday said that it had acquired vital information about the income and expenditure of filers and non-filers.

    The revenue board advised return filers to visit the official information portal to view details of undeclared income and assets details available with the database of the FBR.

    The FBR also advised the return filers to correct their information before any action under the law was initiated against individuals for hiding taxable income.

    The FBR said that income tax return filing is mandatory to those persons who had obtained National Tax Number (NTN). Therefore, such persons should file their returns to avoid penal action.

    The FBR asked unregistered paying withholding tax should also apply for registration and file their income tax return.

    It is important to note that the last date for filing income tax returns for the tax year 2020 is December 08, 2020. The date was already extended by the FBR from September 30, 2020.

    The FBR made it clear that no further extension would be granted beyond December 08, 2020.

  • Tax return filing reaches record high at 2.92 million

    Tax return filing reaches record high at 2.92 million

    ISLAMABAD: The filing of income tax return has reached a new high of 2.92 million following effective measures taken by the tax authorities to encourage persons having taxable income to file their return, according data released by Federal Board of Revenue (FBR) on Monday.

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  • Income tax rate on sale of petroleum products

    Income tax rate on sale of petroleum products

    The Federal Board of Revenue (FBR) has recently announced an update to the rate of income tax on the sale of certain petroleum products for the tax year 2021, spanning from July 01, 2020, to June 30, 2021.

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  • Advance tax rate on sale to retailers updated

    Advance tax rate on sale to retailers updated

    ISLAMABAD: Federal Board of Revenue (FBR) has updated rate of advance income tax on sale to retailers during tax year 2021 (July 01, 2020 to June 30, 2020).

    The FBR issued Income Tax Ordinance, 2001 (updated up to June 30, 2020) after incorporating amendment brought through Finance Act, 2020.

    The rate of collection of tax under section 236H on the gross amount of sales shall be:

    The rate of advance tax on sale of electronics shall be one percent. The rate of advance tax in case of sales to other goods shall be 0.5 percent.

    Following is the text of Section 236H of Income Tax Ordinance, 2001:

    236H. Advance tax on sales to retailers.— (1) Every manufacturer, distributor, dealer, wholesaler or commercial importer of electronics, sugar, cement, iron and steel products, motorcycles, pesticides, cigarettes, glass, textile, beverages, paint or foam sector, at the time of sale to retailers, and every distributor or dealer to another wholesaler in respect of the said sectors, shall collect advance tax at the rate specified in Division XV of Part IV of the First Schedule, from the aforesaid person to whom such sales have been made.

    (2) Credit for the tax collected under sub-section (1) shall be allowed in computing the tax due by the retailer on the taxable income for the tax year in which the tax was collected.

  • FBR developing software to eliminate bogus invoices: CTO Chief

    FBR developing software to eliminate bogus invoices: CTO Chief

    KARACHI: Federal Board of Revenue (FBR) is working to develop a new software which will eliminate flying / bogus invoices, Dr. Aftab Imam, Chief Commissioner, Corporate Tax Office (CTO) Karachi said during his visit to Pakistan Hosiery Manufacturers Association (PHMA).

    The chief commissioner assured the exporters that all the issues of exporters will be resolved on top priority without delay, a statement issued by PHMA on Saturday quoted the chief commissioner as saying.

    The chief commissioner stated that exporters may personally visit his office to meet and discuss their individual issues in order to resolve them. He stated after transformation to FASTER plus, the sales tax refund system was efficiently processing the claims. There were certain checks in the system which was necessary.

    He said that CTO was playing its due role in policy making by communicating the matters and issues related to exporters by sending to the Board for implementation thereof.

    Commenting on the Post Refund Audit notices, he added that all the income tax notices issued bear a barcode while the Post Refund audit notices regarding sales tax bear no barcode, however, they are valid notices.

    The system is going through developmental phase and in next few weeks Post Refund Audit notices issued shall also reflect the barcode.

    Replying to huge demand of documents in the notices, he opined that particular documents which are not available in the online system like stock and proof of payment should be given.

    Responding to the requests of issuance of zero rated certificates, he informed that he has already written to FBR for the purpose. Upon confirmation, the requested certificates shall be issued on urgent basis.

    Earlier Tariq Munir, Chairman (SZ), Pakistan Hosiery Manufacturers & Exporters Association welcomed the Dr. Aftab Imam, Chief Commissioner, Corporate Tax Office (CTO) Karachi who was accompanied by Zulfiqar Khokhar, Collector to PHMA.

    Speaking on the occasion, Muhammad Jawed Bilwani, Chief Coordinator & Former Central Chairman, Pakistan Hosiery Manufacturers & Exporters Association invited the attention of Chief Commissioner CTO-Karachi on burning issue of exporters related to Sales Tax Refund / Audit, Income Tax Refund / Audit, Zero Rated Certificate for reduced tariff of electricity and gas and other issues.

    He was of the view that after a lapse of 16 months, after various consultative sessions, suggestion of exporters, FASTER refund system has been improved and also transformed to FASTER plus which is appreciable as the system is efficiently processing the refunds electronically up to 80 percent without human involvement.

    Remaining 20 percent may have some issues of filing which after resolution shall also be processed on fast track.

    He was of the view that due to speedy refunds increasing trend in textile exports is witnessed. He stated that several members have informed that still amounts are missed and deferred in the FASTER system which should be looked into and rectified. He proposed that total missing amount should be reflected in the Sales Tax Refund MIS.

    Bilwani also highlighted the matter of Notices of Post Audit Refund of Sales Tax as well as Income Tax issued to exporters demanding huge documentation which is already available with FBR system and same should be done away with and only necessarily required relevant documents should be demanded because the entire textile export chain is documented.

    He also urged that all the FBR Notices should have barcodes and should sent electronically. The exporters should be provided the facility to apply for zero rated certificate regarding reduced tariff of gas and electricity to FBR and same should also be provided electronically.

    FBR and SRB system are linked and integrated. exporters are in practice to adjust WWF amount against income tax refund. Hence, the FBR should intimate to the SRB that the exporters have paid the WWF amount.

    On this occasion, Abdul Jabbar Gajiani, Senior Vice Chairman, Bashir Ghaffar Vice Chairman, Khizer Mehboob, Chairman, Taxation Committee, Abdur Rehman Former Vice Chairman PHMA, Saleem Parekh, Qadir Bilwani, Ilyas Gigi, Advocate Arshad Shehzad, Tax Advisor presented and other member exporters through zoom participated in the meeting.