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.

Manual tax collection to be eliminated by January: SBP

KARACHI: The manual collection of taxes will be eliminated by January 2021 and in this regard Federal Board of Revenue (FBR) and State Bank of Pakistan (SBP) have agreed on the timelines.

The central bank in a report said that the timelines were agreed with FBR to gradually eliminate the manual tax collections by January 2021.

“As a first step in this direction, the option of manual tax payment by corporate sector was eliminated from August 2020,” the SBP said.

During 2019/2020, the SBP intensified efforts to digitize government receipts and payments. In order to bring the cost of digital tax payments and manual paper based tax payment, the nominal fee on digital payment of taxes on the tax payers was eliminated which would be absorbed by SBP.

As the fee is nominal as compared to the agency commission, the SBP pays to agent banks for traditional paper based tax collection, the absorption of digital tax payment fee by SBP, will in fact reduce the net cost of tax collections for SBP.

Further, in a significant development in this respect, timelines were agreed with FBR to gradually eliminate the manual tax collections by January 2021. As a first step in this direction, the option of manual tax payment by corporate sector was eliminated from August 2020.

The SBP said that the Alternate Delivery Channels (ADC) system for collection of government taxes is functioning and robustly for different agencies of the federal government and Government of Punjab.

The taxpayers pay their taxes through internet banking, mobile banking, ATMs and Over-the-Counters (OTC) facility of branches of commercial banks across the country.

“Since its launch in March 2018, an aggregate amount of Rs.829 billion of government taxes and duties has been collected.”

In order to promote digital payments of government taxes and duties, SBP with effect from January 1, 2020, eliminated the transaction fee for taxpayers using digital modes for payment of duties and taxes of federal and provincial governments.

Further, to utilize the potential of ADCs system fully, SBP and FBR have agreed to gradually replace the manual payments of FBR’s taxes with the ADCs system starting with corporate taxpayers from first quarter (July – September) of 2020/2021.

Accordingly, payments of FBR’s Taxes by AOPs/Partnerships and individuals will be shifted completely on the ADCs in the Second Quarter and Third Quarter of 2020/2021 respectively.

Similarly, SBP is negotiating with other provincial governments to use this facility for their taxpayers and utilize the umbrella of ADCs for collection of their taxes and levies. Recently, SBP, M/s 1Link and Islamabad Capital Territory Administration (ICTA) have executed a tripartite agreement for extension of ADC system for collection of ICTA taxes and duties.

While negotiation with Finance Department, Khyber Pakhtunkhwa are at advance stage for initiation of online collections, negotiation with other provincial governments will be initiated in FY21. The project will be broadly based on the model already implemented for FBR and Government of Punjab.

After digitization and automation of Person to Government (P2G) payments, SBP and GoP are now working on digitization of Government to Person (G2P) payments.

As a part of G2P digital payments, SBP and Pakistan Customs are working on digitization of Duty Drawbacks refunds to business in the first phase. After digitization of this process, Customs will generate and deliver a message to SBP for payment of refunds directly into the exporter’s bank account upon realization of foreign exchange proceeds of export consignment.

The successful implementation of this project will be a milestone towards digitization of G2P payments and will help in the government’s initiatives for ease in doing business.

October 31, 2020
Date for filing income tax returns not to be extended: FBR

ISLAMABAD: Federal Board of Revenue (FBR) on Saturday said that it will not further extend the date for filing income tax return for tax year 2020.

A FBR spokesman said that the date for filing income tax return has already been extended up to December 08, 2020. “Therefore, no further date will be given beyond the extended timeline,” the spokesman added.

The last date for filing income tax return for tax year 2020 was September 30, 2020. However, the FBR extended the date up to December 08, 2020.

The spokesman said that the FBR had taken many measures to facilitate taxpayers. “An easy return form for tax year 2020 has been introduced. Taxpayers now submit their annual returns through wizard bases interface. Further, the returns can be submitted through smart phone application,” the spokesman added.

The FBR has identified persons having taxable income but those are remained non-compliant in filing their returns. The FBR also identified those persons who have source of earnings but have not declared their true incomes.

“The details of all such persons are available at the FBR’s database. These persons have been given last chance to declare their true income and assets to avoid legal action,” the spokesman said.

October 31, 2020
Commissioners IR given power to select taxpayers for audit

ISLAMABAD: Federal Board of Revenue (FBR) has decided to authorize Commissioner Inland Revenue to select cases for audit under relevant provisions of tax laws.
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October 31, 2020
FBR notifies promotions of IRS, PCS officers to BS-22

ISLAMABAD: Federal Board of Revenue (FBR) has notified promotions to BS-22 of officers of Inland Revenue Service (IRS) and Pakistan Customs Service (PCS).

According to a notification issued October 29, 2020, in pursuance of approval of the Competent Authority conveyed vide Establishment Division’s U.O No.7/1/2020-CP-VI, dated 29.10.2020, the following BS-21 officers of IRS are promoted to BS-22 in the same service on regular basis with immediate effect:-

1) Ms. Seema Shakil

2) Nadir Mumtaz Warraich

3) Dr. Muhammad Ali Khan

The FBR said that the officers appearing at Sr .No. 2 and 3 will actualize their promotion from the date they return from deputation and join FBR.

Through another notification, the FBR said in pursuance of approval of the Competent Authority conveyed vide Establishment Division’s U.O.No.7/1/2020-CP-VI dated 29.10.2020, the following BS-21 officers of PCS are promoted to BS-22 in the same service with immediate effect and until further orders:-

(i) Abdul Rashid Sheikh

(ii) Muhammad Saleem Ahmad Ranjha

The FBR said that if the officers are drawing Performance Allowance prior to issuance of these notifications, they will continue to draw this allowance on their promotion.

October 31, 2020

Motor vehicle tax rates for Tax Year 2021

ISLAMABAD: Federal Board of Revenue (FBR) has updated rate of income tax on motor vehicles used for passenger and goods transportation. The income tax rate shall apply 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 rate of income tax on motor vehicles under Section 234 of Income Tax Ordinance, 2001:

Rates of collection of tax under section 234,—

(1) In case of goods transport vehicles, tax of two rupees and fifty paisa per kilogram of the laden weight shall be charged.

(1A) In the case of goods transport vehicles with laden weight of 8120 kilograms or more, advance tax after a period of ten years from the date of first registration of vehicle in Pakistan shall be collected at the rate of twelve hundred rupees per annum;

(2) In the case of passenger transport vehicles plying for hire with registered seating capacity of—

S.No.	Capacity	Rs per seat per annum
(i)	Four or more persons but less than ten persons.	50
(ii)	Ten or more persons but less than twenty persons.	100
(iii)	Twenty persons or more.	300

(3) In case of other private motor vehicles shall be as set out in the following Table, namely:-

S. No.	Engine capacity	Tax
(1)	(2)	(3)
1.	upto 1000cc	Rs. 800
2.	1001cc to 1199cc	Rs. 1,500
3.	1200cc to 1299cc	Rs. 1,750
4.	1300cc to 1499cc	Rs. 2,500
5.	1500cc to 1599cc	Rs. 3,750
6.	1600cc to 1999cc	Rs. 4,500
7.	2000cc & above	Rs. 10,000

(4) where the motor vehicle tax is collected in lump sum,

S. No.	Engine capacity	Tax
(1)	(2)	(3)
1.	upto 1000cc	Rs. 10,000
2.	1001cc to 1199cc	Rs. 18,000
3.	1200cc to 1299cc	Rs. 20,000
4.	1300cc to 1499cc	Rs. 30,000
5.	1500cc to 1599cc	Rs. 45,000
6.	1600cc to 1999cc	Rs. 60,000
7.	2000cc & above	Rs. 120,000

Following is Section 234 of Income Tax ordinance, 2001

Tax on motor vehicles— (1) Any person at the time of collecting motor vehicle tax shall also collect advance tax at the rates specified in Division III of Part IV of the First Schedule.

(2) If the motor vehicle tax is collected in instalments or lump sum the advance tax may also be collected in instalments or lump sum in like manner.

(2A) In respect of motor cars used for more than ten years in Pakistan, no advance tax shall be collected after a period of ten years.

(3) In respect of a passenger transport vehicle with registered seating capacity of ten or more persons, advance tax shall not be collected after a period of ten years from the first day of July of the year of make of the vehicle.

(4) In respect of a goods transport vehicle with registered laden weight of less than 8120 kilograms, advance tax shall not be collected after a period of ten years from the date of first registration of vehicle in Pakistan.

(5) Advance tax collected under this section shall be adjustable.

(6) For the purpose of sub-sections (1) and (2) “motor vehicle” shall include the vehicles specified in sub-section (7) of section 231B.

October 30, 2020

Mobilink terms FBR recovery action as unfortunate

ISLAMABAD: A spokesman of Jazz (Mobilink) on Thursday said that the treatment of the Federal Board of Revenue (FBR) for the recovery of disputed amount through sealing the office was unfortunate.

“Despite being the largest taxpayers, we are treated in an unfortunate way,” a company spokesman said.

“While the government is making efforts to improve the business environment in the country, such drastic measures would unfortunately severely affect investment prospects,” the spokesman said in a statement.

“We have received a notice from FBR yesterday for the recovery of a disputed tax demand and we have serious reservations on these alleged taxes.

“The proceedings were carried out on plea of a tax recovery notice for a disputed amount from 2018 which is under legal proceedings.

“Due to the drastic measures our corporate reputation and pride has been hurt and shakes the confidence of foreign investors of Jazz and others.

“Despite being the largest taxpayers, we are treated in an unfortunate way.

“While the government is making efforts to improve the business environment in the country, such drastic measures would unfortunately severely affect investment prospects,” the spokesman said.

Jazz seeks resolution of the matter and has always been willing to conduct dialogue as well as rightful legal course to reach merit and right interpretation.

“Jazz also assures its valued customers that despite the challenges, we will continue to provide uninterrupted services,” the statement said.

Mobilink is Pakistan’s number one 4G operator and the largest internet and broadband service provider is amongst the largest taxpayers and the biggest foreign investors with an investment of over US$ 9.5 billion during the last 25 years.

In the last 6 years alone, Jazz has contributed over Rs251 billion to the national exchequer in the form of taxes and duties.

Jazz has always been a law-abiding corporate citizen and has been in the forefront for contributing to Pakistan’s economy in monetary and development terms, and as the market leader in telecom and internet services with over 63 million customers.

The company has also discharged its social responsibility in floods, earthquakes, and recently in COVID-19 relief response worth over Rs1.2 billion.

October 29, 2020
FBR delegates powers of appointing authority

ISLAMABAD: Federal Board of Revenue (FBR) on Thursday notified authorities for appointment of officials in the revenue board.

According to the notification Secretary, the Revenue Division shall have power to appoint officials in the posts in basic pay scales 17 to 19 or equivalent.

Member Admin has been authorized to appoint posts in basic pay scales 16 or equivalent in FBR Headquarter and its field offices.

Chief (Management) has been authorized to appoint officials in basic pay scales 8 to 15 or equivalent in FBR HQ.

Chief Admin has been authorized to appoint officials in post of basic pay scales 1 to 7 or equivalent in FBR HQ.

For appointing in posts in BS-1 to 15 of field offices of the FBR, the appointing authorities are chief commissioner in BS-20/21, Director General (BS-21), Chief Collectors (BS-21), Collectors (BS-20).

October 29, 2020
FBR launches crackdown against sugar mills for benami transactions

ISLAMABAD: Federal Board of Revenue (FBR) has launched investigation against sugar mills after detection of large scale benami transactions.

A statement issued on Thursday, the FBR said that Benami Zone II, Lahore has taken up the investigation of 5 sugar mills for the verification of benami transactions.

Purchasers with the largest quantities as declared by the mills in their sales tax returns, were randomly summoned to ascertain their authenticity as buyers of sugar.

The exercise unraveled the occurrence of benami transactions at a large scale during the preliminary investigation.

Keeping in view the HR constraints, logistical limitations and narrow timelines involved in the proceedings, detailed scrutiny was initiated in two sugar mills initially i.e. Alliance Sugar Mills and Hunza Sugar Mills. As far as rest of the sugar mills are concerned, information will be gathered including information from the banks and proceedings will be started after concluding the already initiated cases.

Show cause notices u/s 22 of Benami Transaction (Prohibition) Act 2017 have been served upon M/s Hunza Sugar Mills and M/s Alliance sugar mill whereby the mills with the actual buyers of sugar and sugar mills brokers have been alleged to have conducted benami transactions.

Perusal of the sales tax returns of Alliance Sugar Mills and Hunza Sugar Mills showed that sugar worth PKR 19,125,774,948 and PKR 5,164,464,58 respectively, for TY 2017-2020, had been sold by mills to unregistered persons.

To check the authenticity of these buyers, Benami Zone II, Lahore issued summons to multiple purchasers who in their written statements denied knowledge of any such transaction.

During the course of investigation, it was extracted that the unregistered purchasers being shown in sales tax returns of the aforementioned sugar mills were ostensible owners including low paid workers or truck drivers, rather than the real owners, which to date remain unaware of their involvement in sugar purchase.

The provisions of the law stipulate that subject to the issuance of notice to show cause u/s 22, the Initiating Officer has to attach the benami property within 90 days incase the Initiating Officer intends to file the reference in the case.

The law additionally provides 60 days to the IO for the drafting of the case statement to further forward it to the Adjudicating Authority. In case the IO finds no aspect of benami transaction during the course of investigation within 90 days of issuance of show cause notice, he is bound by law to drop the proceedings.

With the filing of reference, the Adjudicating Authority is under obligation to issue notice to the beneficial owner, benamidar and any interested party within 30 days of receipt of reference requiring them to file their reply.

In case benamidar/beneficial owner is involved in the commission of benami transaction, the Adjudicating Authority would pass order holding the property referred in reference as benami property and passing order to that effect.

The law binds Adjudicating Authority to decide reference within one year from the date of filing of reference. The Adjudicating Authority, after holding the property benami, initiates proceedings for confiscation of benami property.

Besides confiscation of benami property, the law provides prosecution of benamidar, beneficial owner and abettor etc. Subsequent to the trial, the law provides that the person involved in benami transactions would be sentenced to imprisonment extending from one year to seven years and additional payment of 25 percent of fair market value of the property involved.

October 29, 2020
Chain stores sign MoU to integrate with FBR’s online system

ISLAMABAD: Big retailers with chain stores have agreed to install Point of Sale (POS) at their outlets to integrate sales and purchase with online system of Federal Board of Revenue (FBR).

In this regard a Memorandum of Understanding (MoU) was signed between the FBR and Chain Stores Association of Pakistan (CAP) to ensure effective and efficient integration of (POS) installed at Tier 1 retailers’ location all across the country.

This huge milestone achieved on Wednesday provides for incentives to the retailers who voluntarily integrate with FBR’s system by November 30, 2020.

To facilitate smooth integration and collectively manage any bottlenecks, CAP committees will be formed at central and regional levels.

The chain store retailers assured FBR that all Tier 1 integrated retailers would fully integrate all their tills/PoS without any exception by November 30, 2020.

They also assured that all of their branches would be fully integrated by then. The association will also augment FBR’s efforts to improve the PoS system and make it foolproof.

CAP will also assist FBR in the identification of all Tier 1 and Tier 2 Retailers who are liable to be integrated and have not yet integrated.

The foundational principle of this MoU and the benefits agreed to by FBR is complete integration by Tier 1 Retailers with FBR’s system by November 30, 2020.

October 29, 2020
FBR takes notice of officials’ reluctance in joining new place of posting

ISLAMABAD: Federal Board of Revenue (FBR) has decided to take departmental action against officials who are reluctant in joining new place of posting.

In a circular issued on Wednesday, the FBR has taken notice that officials are not adhered to instructions laid down in transfer and posting orders.

“The transfer and posting orders are issued with immediate effect but it has been observed that officers and officials do not relinquish the charge as per orders/notifications and board has to relieve them from their previous postings to join new place of postings,” the FBR said.

Furthermore, as mentioned in each order/notification, that officers are required to relinquish and assume charge using online HRMS facility made available at all FBR major field offices or by using IJP login available to them. “However, despite clear directions on the same manual charge relinquishment and assumption reports are forwarded to the FBR as a practice which creates lot of administrative issues for FBR.

Taking serious view of the non adherence of the administrative instructions, following instructions are being issued in this regard to be followed in letter and spirit in future:

i. Officers will relinquish the charge within three days of transfer and posting orders, and will assume charge of new place of posting as per rules. In case of failure, action will be initiated for non-adherence to the Board’s instructions.

ii. No manual charge relinquishment/assumption report will be entertained in board in future, and the officers are directed to do the same through using online HRMS facility made available at all FBR major field offices or by using IJP login. However if any difficulty arises in this regard, officers are directed to contact MIS officers posted at respective filed formations or Secretary (Automation/SSM).

iii. The concerned ADC/DC HQ shall be personally responsible and ensure that all officers posted in and out of the field offices have assumed/relinquished charge as per instruction.

iv. Chief Commissioners-IR and Director Generals-IR shall be responsible for the compliance of the board’s instruction in letter and spirit.

October 29, 2020