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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.

  • Minimum penalty Rs10,000 for failure in updating taxpayer profile

    Minimum penalty Rs10,000 for failure in updating taxpayer profile

    ISLAMABAD: A minimum penalty of Rs10,000 has been prescribed for one day after deadline for updating taxpayer profile under Section 114A of the Income Tax Ordinance, 2001.

    The updating profile by a taxpayer has been mandatory through Finance Act, 2020. The last date for updating the profile is March 31, 2021.

    According to Section 182 of Income Tax Ordinance, 2001 any person who is required to furnish or update a taxpayer’s profile but fails to furnish or update within due date then such a person shall pay a penalty of Rs2,500 for each day of default from the due date subject to a minimum penalty of Rs10,000.

    According to the Section 114A:

    Taxpayer’s profile.-(1) Subject to this Ordinance, the following persons shall furnish a profile, namely:-

    (a) every person applying for registration under section 181;

    (b) every person deriving income chargeable to tax under the head, “Income from business”;

    (c) every person whose income is subject to final taxation;

    (d) any non-profit organization as defined in clause (36) of section 2;

    (e) any trust or welfare institution; or

    (f) any other person prescribed by the Board.

    (2) A taxpayer’s profile-

    (a)shall be in the prescribed form and shall be accompanied by such annexures, statements or documents as may be prescribed;

    (b) shall fully state, in the specified form and manner, the relevant particulars of –

    (i) bank accounts;

    (ii) utility connections;

    (iii) business premises including all manufacturing, storage or retail outlets operated or leased by the taxpayer;

    (iv) types of businesses; and

    (v) such other information as may be prescribed;

    (c) shall be signed by the person being an individual, or the person’s representative where section 172 applies; and

    (d) shall be filed electronically on the web prescribed by the Board.

    (3) A taxpayer’s profile shall be furnished,-

    (a) on or before the 31st day of December, 2020 in case of a person registered under section 181 before the 30th day of September, 2020; and

    (b) within ninety days registration in case of a person not registered under section 181 before the 30th day of September, 2020.

    (4) A taxpayer’s profile shall be updated within ninety days of change in any of the relevant particulars of information as mentioned in clause (b) of sub-section (2).

    Through Circular No. 08 of 2020, the FBR extended the date of furnishing of taxpayer’s profile from December 31, 2020 to March 31, 2021.

  • Abolishing tax credit for new industrial setup proposed

    Abolishing tax credit for new industrial setup proposed

    ISLAMABAD: Federal Board of Revenue (FBR) has proposed to withdraw tax credit available for establishment of new industrial establishment as the facility was misused by existing industrial units.

    The investors have tax credit under Section 65D of Income Tax Ordinance, 2001 for five years.

    However, many misuses of exemption/concession claims under section 65D of the Income Tax Ordinance, 2001 by industrial undertakings had been detected in recent years, where an existing industrial undertaking took the guise of a new industrial undertaking to claim tax credit.

    The sources said that an amount of Rs5.57 billion was granted as tax concession during tax year 2020 for newly established industrial undertakings. However, the net impact of the tax credit is Rs15 billion every year.

    They said that the FBR had discovered that some ghee manufacturers were availing this credit by splitting up their existing industrial units with a newer one.

    Further, investigation revealed that the production of those ghee manufacturers were remained stagnant or growth with the pace of inflationary growth despite declaring to set up new units.

    The FBR on the directives of the federal government had started cleaning up exemptions and concessions granted under Income Tax Ordinance, 2001 to make the taxation system equitable.

    In a recent high level meeting chaired by the Prime Minister Imran Khan, the FBR proposed withdrawal of many provisions of the ordinance related to exemption and concession.

    The FBR proposed to omit the tax credit provision available to newly established industrial undertakings that is already expiring on June 30, 2021.

    The tax credit available under this provision is for five years from the date of setting up the new industrial unit. The sources said that those who claimed the tax credit or set up a new unit by June 30, 2021 would be able to avail the concessions for next five years.

    The provision for the grant of tax credit was introduced through the Finance Act, 2011 for next five years. However, it was extended to June 30, 2019 and then further extended up to June 30, 2021.

  • Key proposals to withdraw tax exemptions

    Key proposals to withdraw tax exemptions

    ISLAMABAD: The government is going to withdraw various exemptions allowed under Income Tax Ordinance, 2001.

    The exemption may be withdrawn through Income Tax (Second Amendment) Ordinance, 2021, the sources said on March 21, 2021.

    Following are the highlights of the proposed law:

    It is proposed to omit power of Federal Board of Revenue (FBR) to declare any sector or industry as industrial under taking under Section 2 Clause (29C) of Income Tax Ordinance. 2001.

    Under Section 23A of the Income Tax Ordinance, 2001 it is proposed to omit first year allowance equal to 90 percent of the cost of plant and machinery to mobile phone manufacturers and other industrial undertakings located in underdeveloped areas.

    Under Section 61 of the Income Tax Ordinance, 2001 it is proposed to enhance the scope of tax credit for contribution to non-profit and other organizations as direct deduction of such expense is being proposed to be done away with by omitting clause 61 of part I of the second schedule.

    Under Section 64C of the Income Tax Ordinance, 2001, it is proposed to omit tax credit available to persons employing fresh graduates. It was available maximum up to 5 percent of the tax liability.

    Under Section 65C of Income Tax Ordinance, 2001 it is proposed to omit tax credit to companies equal to 20 percent of tax payable for first two years and 10 percent for next two years  of enlistment at stock exchange.

    Section 65D of Income Tax Ordinance, 2001, it is proposed to omit tax credit available to newly established industrial undertakings.

    Under Section 65F of Income Tax Ordinance, 2001, it is proposed that the exemptions available to persons engaged in coal mining in Sindh, IT exports and startups to be replaced with tax credit.

    Under section 65G of Income Tax Ordinance, 2001, the exemptions available to greenfield industrial undertakings and industries engaged in manufacture of plant, machinery, equipment and items with dedicated use (no multiple uses) for generation of renewable energy have been proposed to be replaced with tax credit on the basis of  investment made in plant machinery, building, computer, hardware and software.

    Under Section 100C of Income Tax Ordinance, 2001 law related to tax credit available to charitable organizations has been re-drafted to make it simpler & easier besides streamlining the regime with other provisions. No substantial change.

    Under Section 152 of Income Tax Ordinance, 2001, technical correction in sub-section (1E) to synchronize with other sub-sections

  • FBR taking all measures to resolve taxpayers’ grievances: Javed Ghani

    FBR taking all measures to resolve taxpayers’ grievances: Javed Ghani

    The Federal Board of Revenue (FBR) is actively pursuing measures for redressal, as affirmed by FBR Chairman Muhammad Javed Ghani on Friday.

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  • FBR collects Rs1.8bn as capital gain tax on sale of securities

    FBR collects Rs1.8bn as capital gain tax on sale of securities

    KARACHI: Federal Board of Revenue (FBR) has collected Rs1.8 billion as capital gain tax on sale of securities during first eight months (July – February) 2020/2021.

    The collection of capital gain tax on sale of securities has increased by 31 percent to Rs1.8 billion during first eight months of the current fiscal year as compared with Rs1.37 billion in the corresponding period of the last fiscal year, sources in Large Taxpayers Office (LTO) Karachi said on Friday.

    The collection was made under Section 147 (5B) of Income Tax Ordinance, 2001.

    Adjustable advance tax on capital gain from sale of securities shall be chargeable as under, namely:—

    Where holding period of a security is less than six months: the rate of advance tax shall be two percent of the capital gains derived during the quarter.

    Where holding period of a security is more than six months but less than 12 months: the tax rate shall be 1.5 percent of the capital gains derived during the quarter.

    Provided that such advance tax shall be payable to the Commissioner within a period of twenty-one days after the close of each quarter: Provided further that the provisions of this sub-section shall not be applicable to individual investors.

  • Pakistan, Qatar agree on promoting tax cooperation

    Pakistan, Qatar agree on promoting tax cooperation

    ISLAMABAD: Pakistan and Qatar on Thursday agreed to promote bilateral relations in customs and taxes.

    Ambassador of Qatar in Pakistan, Sheikh Saoud Abdul Rahman Al-Thani Thursday called on Chairman Federal Board of Revenue (FBR), Muhammad Javed Ghani.

    Matters of mutual concern pertaining to cooperation on customs and tax were discussed in the meeting according to an FBR press statement issued here.

    It was agreed in the meeting that relevant departments of both countries would further promote the cooperation in the field of customs and tax and would learn from each other’s best practices which would result in increasing the trade volume between the two countries.

    Chairman FBR briefed the Qatari Ambassador about the recent measures taken by FBR for the mobilization of revenue and facilitation of taxpayers.

    Qatari Ambassador appreciated the recent performance of FBR in the first eight months of current financial year and hoped that FBR would successfully achieve the revenue target set for the current year.

  • Tax credit for enlistment in stock exchange may be withdrawn

    Tax credit for enlistment in stock exchange may be withdrawn

    ISLAMABAD: The government likely to withdraw tax credit available to companies for enlistment in stock exchange.

    The withdrawal of tax credit is part of proposal to rationalize tax exemption regime in the country. The law to withdraw tax exemption and incentives may be introduced soon.

    The tax credit for enlistment is available under Section 65C of the Income Tax Ordinance, 2001. The tax credit is available for three years. The first year tax credit for enlistment in stock exchange is 20 percent of the tax payable for the year in which the company is enlistment. Meanwhile tax credit for the following two years is 10 percent of the tax payable.

    The government is considering omitting this tax credit. The Federal Board of Revenue (FBR) granted an amount of Rs357 million as tax credit during fiscal year 2019/2020 to the companies listed with stock exchange availing this incentive.

  • 200,000 late filers get active taxpayers status

    200,000 late filers get active taxpayers status

    ISLAMABAD: Around 200,000 income tax return filers paid surcharge to get their names in Active Taxpayers List (ATL) during past 15 days.

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  • FBR issues preventive measures for stage-III coronavirus

    FBR issues preventive measures for stage-III coronavirus

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday issued preventive measures for stage-III coronavirus pandemic.

    The FBR directed all the officers of the headquarters and field formations (BS-17 to BS-21) to restrict the working strength of their offices to only one clerical / ministerial staff and one Naib Qasid on weekly/fortnightly rotation basis with effect from March 16, 2021.

    The FBR further said that employees having symptoms of COVID-19 must immediately get themselves tested for the same and in case tested positive, they must immediately quarantine / isolate themselves at homes for fourteen (14) days. “During this period, their entry to concerned offices shall be banned.”

    COVID-19 positive employees shall get themselves tested at the end of fourteen (14) days quarantine/isolation period and only in case of negative results, shall resume their official duties.

    In order to avoid physical contact with door handles and to keep the rooms/offices properly ventilated and well-lit, it is also advised that all offices doors/windows be kept open.

  • FBR appoints panel of advocates for Karachi tax offices

    FBR appoints panel of advocates for Karachi tax offices

    KARACHI: Federal Board of Revenue (FBR) on Tuesday appointed a panel of advocates to present the tax offices in Karachi before various legal forums.

    The FBR placed following advocates, on the panel of the FBR, relating to court matters of Inland Revenue Service for a period of three years:

    01. Ali Tahir

    02. Iftikhar Hussain Qureshi

    03. Ayaz Sarwar Jamali

    04. Sardar Zafar Hussain

    05. Munawar Ali Memon

    06. Chaudhary Mehmood Anwar

    07. Ijazuddin Qureshi

    08. Irfan Mir Halipota

    09. Saif Ali Akbar

    10. Muhammad Taseer Khan

    11. Iqbal Hussain

    12. Qasim Ali

    13. Ghulam Murtaza Korai

    14. Rana Sakhawat Ali

    15. Mansoor ul Haq Solangi

    16. Syed Muhammad Salman Ali

    17. Naureen Iqbal

    18. Syed Zaeem Hyder Musavi

    19. Fayyaz Ali Metlo

    20. Masood Rasool Babar

    21. Farhan Ali Shah

    22. Ms. Abida Perveen Channar

    23. Akhtar Hussain Sheikh

    24. Zafar Imam

    25. Imtiaz Ali Solangi

    The FBR said that the advocates may be assigned court cases for pleading before various courts/tribunals at Karachi Station, on the basis of merit, keeping in view their experience and facts of the each case.