The Federal Board of Revenue (FBR) has granted income tax exemptions totaling Rs27 billion during the tax year 2020 to power generation companies operating in Pakistan. These exemptions were extended to 73 companies, underlining the government’s efforts to support the energy sector.
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Withholding tax from cash withdrawal plunges by 52 percent; remains in top 10 revenue spinners
ISLAMABAD, September 15, 2024 – The Federal Board of Revenue (FBR) has reported a sharp decline in the collection of withholding tax (WHT) by 52% during the tax year 2020, following the abolishment of the tax for income tax return filers.
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FBR officials found involved in exerting political pressure in administrative matters
ISLAMABAD: Federal Board of Revenue (FBR) has taken strict notice against officials involved in exerting political influence in administrative matters.
In an official note issued on Monday, the Member Admin, FBR warned all officials of Inland Revenue and Pakistan Customs to restrained from such activities as same would attract disciplinary action.
The Member said that certain officers in total disregard to rules of Government Servants (Conduct) Rules, 1964 are exerting political/external pressures and interferences in connection with their posting/transfers etc.
“At the outset let me clarify that it is a misconduct under the Government Servant (Conduct) Rules, 1964 read with Government Rule 2(4) of Government Servants (E&D) Rules, 1973 and attracts strict disciplinary action under the said rules,” the Member said.
“However, at a first step let me warn all these officers to shun this attitude,” the Member said, adding that all these officers have been marked and necessary observations have been placed in their personal dossiers.
He said that such observations would be done of the main considerations at the time of making their all career decisions including promotion and disciplinary proceedings besides placement and rotations.
“Therefore, at the cost of the repetition every officer is once again advised to be cautious of the seriousness of this subject at all times,” the Member added.
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Salaried persons pay Rs129 billion in Tax Year 2020
ISLAMABAD: Salaried persons have paid Rs129 billion as income tax at source during tax year 2020, which is 70 percent higher than the collection under this head during preceding year, according to official documents.
The FBR had collected Rs76 billion as income tax from salaried persons during tax year 2019.
The FBR officials attributed to significant increase in income tax collected at source form salaried person was due to change in tax slabs through Finance Act, 2019.
It is interesting to note that the exempt income chargeable to tax was increased to Rs600,000 from Rs400,000 for salaried persons through Finance Act, 2019.
However, tax rate for salaried persons falling in the higher salary bracket had been increased up to 35 percent through the Finance Act, 2019.
The tax officials said that share of tax collection from salary has been increased to 11.9 percent in the total collection of withholding taxes during Tax Year 2020.
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Sales tax collection from textile sector jumps six-fold
ISLAMABAD: The collection of sales tax from textile sector registered a six-fold increase in fiscal year 2019/2020 owing to elimination of zero-rated tax regime.
According to official statistics released by Federal Board of Revenue (FBR) the sales tax collection from textile sectors sharply increased to Rs61.2 billion during fiscal year 2019/2020 as compared with Rs8.7 billion in the preceding fiscal year, showing a growth of 602 percent.
The unprecedented growth in sales tax collection from this sector can be attributed to elimination of zero-rated scheme through Finance Act, 2019.
In the budget 2019/2020, the government decided to eliminate zero-rating scheme for textile sector and imposed normal 17 percent sales tax on all supply of textile products, except for those subject to exports.
The FBR issued Circular No. 01 of 2019 dated July 26, 2019 and explained that SRO 1125(I)/2011 dated December 12, 2011, relating to zero-rating of five export-oriented sectors, had been rescinded since July 01, 2019 through SRO 694(I)/2019 dated June 29, 2019.
From July 01, 2019, the items listed in the said SRO had been charged to sales tax at 17 percent at import and local supply. However, in case of integrated retail outlets, sales tax on finished textile and leather items were subject to 14 percent sales tax, according to the circular.
Further, all Sales Tax General Orders (STGOs) granting zero-rating on supply of electricity, gas, diesel, furnace oil and coal had been rescinded through STGO 100/2019 dated June 29, 2019.
The decision to eliminate the zero-rating was taken due to gross misuse of the scheme. The scheme also attracted issuance of bogus refunds on back of fake and flying invoices resulting huge monetary losses to the national exchequer.
However, in order to resolve the issue of exports in obtaining refunds under new schemes from July 01, 2019 the FBR introduced Fully Automated Sales Tax e-Refund (FASTER) system with a commitment that the refunds would be issued in 72 hours.
Sources in the FBR said that the collection of sales tax from textile sector would have been much higher but it was restricted due to economic slowdown after COVID-19.
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Tax to apply on sale of used cars only on value addition: FBR
ISLAMABAD: Federal Board of Revenue (FBR) on Saturday said that sales tax is applicable at 17 percent on sale of used cars only on value addition.
Clarifying news reports regarding levying of 17 percent sales tax on resale of used and refurbished vehicles, the FBR said that the existing law charged sales tax on full sale value which was harsh and excessive.
On the request of business community who are engaged in such business and after seeking support of major chambers of commerce of the country, a clause was added in the Finance Act to provide relief and to encourage refurbishing of second hand vehicles.
This relief is available to only registered persons in sales tax and is restricted to 17 percent of value addition made by such players.
No unregistered person can deduct or demand such sales tax from a buyer. It is further clarified that only rules have been finalized now.
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FBR collects Rs100 billion as duty, taxes from imported cars
ISLAMABAD: Federal Board of Revenue (FBR) has collected Rs100 billion as customs duty and sales tax on import of cars during fiscal year 2019/2020, according to official documents.
The total revenue from imported cars fell by 31 percent to Rs100 billion during fiscal year 2019/2020 as against Rs144.5 billion in the preceding fiscal year.
The fall in revenue collection from this head mainly attributed to restriction imposed by the government under which the clearance of imported cars has to be done through payment in foreign exchange and that should be verified by banks.
Further, the global traveling restrictions following the spread of COVID-19 pandemic also hampered the revenue growth under this head.
According to official statistics the FBR collected Rs57 billion as customs duty on imported cars during fiscal year 2019/2020 as against Rs81.5 billion in the preceding fiscal year, registering a decline of 30 percent.
Similarly, the collection of sales tax on imported cars fell by 32 percent to Rs43 billion during fiscal year 2019/2020 as compared with Rs63 billion in the preceding fiscal year, showing a decrease of 32 percent.
The country imported motor cars worth $99 million during fiscal year 2019/2020 as compared with $222 million in the preceding fiscal year, showing a decline of 55 percent, according to data released by Pakistan Bureau of Statistics (PBS).
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FBR issues draft rules for settlement of tax cases
ISLAMABAD: Federal Board of Revenue (FBR) has issued draft rules for settlement of tax cases through oversight committee.
The FBR issued SRO 945(I)/2020 to notify draft rules for implementation of law of agreed assessment under Section 122D of Income Tax Ordinance, 2001.
The Section 122D has been inserted to the Ordinance through Finance Act, 2020.
The section allowed an opportunity where a taxpayer, in response to a notice under sub-section (9) of section 122, intends to settle his case, he may file offer of settlement in the prescribed form before the assessment oversight committee.
According to the draft rules, a settlement application shall be made electronically by the applicant in person or by his authorized representative, under Section 122D for agreed assessment to the committee.
A settlement application shall be preferred to the committee after the date of service of the notice under sub-section 9 of Section 122 of the Ordinance and before finalization of assessment.
The commissioner shall not conclude assessment proceedings under Section 122 if an application, made against the notice issued under sub-section (9) of Section 122, lies pending before the committee.
The committee after examination of the contents of an application submitted by an applicant and facts stated therein and on scrutiny of requisitioned record, if any, shall afford opportunity of being heard to the applicant in writing.
The committee shall finalize the application filed under Section 122D of the Ordinance within thirty days of receipt of application or within an extended period of sixty days, for reasons to be recorded in writing by the committee.
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No refund claim to stop at pre-processing stage: FBR
ISLAMABAD: Federal Board of Revenue (FBR) on Saturday said that it has launched an updated version of automated refund payment system and taxpayers will not face hurdles in processing their claims.
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FBR to monitor sugar production through surveillance cameras
ISLAMABAD: Federal Board of Revenue (FBR) will monitor production of sugar through surveillance cameras that will be installed at sugar mills.
In this regard a Memorandum of Understanding (MoU) was signed between FBR and Pakistan Sugar Mills Association (PSMA).
The signing ceremony was held at FBR headquarter. Member IR Operations Dr. Muhammad Ashfaq Ahmed signed the agreement on behalf of the FBR and PSMA President Sikandar Khan signed on behalf of the association.
The FBR on September 21, 2020 issued rules regarding monitoring of production through video links.
On the occasion, Dr. Muhammad Ashfaq, Member IR-Operations said that the FBR was taking all measures to reduce interaction between tax officials and taxpayers and trying to facilitate taxpayers for ease of doing business.
In this regard vide analytics has been introduced, he said, adding that through this technology the monitoring of production would be done through advanced cameras.
He said that FBR would take help of this technology to monitor sugar production for accurate estimates and tax collection.
PSMA President Sikandar Khan praised the FBR initiatives and said that the sugar mills had voluntarily agreed on electronic monitoring of sugar production.
He hoped that the efforts of FBR to use technology and it would improve image of the tax organization.
Tariq Shaikh, Project Director briefed the participants on video analytics and said that recognized vendors would provide technological support to sugar mills and through this the production sites would be directly connected to FBR’s control room.