Federal Board of Revenue (FBR) announced on Wednesday a proposal to expand the range of tax concessions for income derived from the export of software, IT services, and IT-enabled services.
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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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FBR processes first batch of automated income tax refund payment
ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday processed first batch of income tax refund payment through automated system.
Member IR (Operations) inaugurated Centralized Income Tax Refund Office (CITRO) by processing the first batch of income tax refund claims for payment through dedicated VPN tunnel established between FBR and State Bank of Pakistan (SBP).
This is indeed another milestone achieved by the organization through incessant efforts of Member IR Operations and Member IT of FBR, a statement said.
This system would eliminate human interaction between tax authority and taxpayers as well as ensure quick relief to business community.
The FBR said that in line with the vision of the Prime Minister to provide maximum facilitation to the taxpayers and under the guidance of Chairman FBR, the CITRO has been established at FBR in order to facilitate taxpayers by releasing income tax refund payments directly into their bank accounts in an expeditious and transparent manner. This would work in an end-to-end automated manner.
FBR is in process of enhancing this automation process to the next level by creating linkages between all federal and provincial departments as well as large numbers of withholders so that verification and processing of refund claims can also be made in a machine-enabled environment.
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FBR inducts 14 fresh chemical examiners in customs department
ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday inducted 14 fresh chemical examiners (BS-16) in the Customs department.
The FBR said that consequent upon the recommendations of Federal Public Service Commission (FPSC), Islamabad vide letter No.F.4-140/2019-R(FS-I), dated 18.01.2021 and having accepted the terms and conditions of appointment contained in the offer of appointment letter No.1(44)/2018-Cus-III dated 25.01.2021, the following candidates are hereby appointed as Deputy Assistant Chemical Examiner (BS-16) in the Customs Department under the Federal Board of Revenue:-
Sr# FPSC Roll # Name of the Candidates Place of posting 1 921 Muhammad Waqas Ahmad Model Customs Collectorate of Appraisement & Facilitation-West, Karachi 2 79 Arif Ali Model Customs Collectorate of Appraisement & Facilitation-West, Karachi 3 548 Hafiza Fatima Yasin Model Customs Collectorate of Appraisement & Facilitation-West, Karachi 4 742 Sajjad Ali Model Customs Collectorate of Appraisement & Facilitation-West, Karachi 5 490 Ali Qasim Model Customs Collectorate of Appraisement & Facilitation-West, Karachi 6 1105 Shakeel Khan Model Customs Collectorate of Appraisement & Facilitation-West, Karachi 7 586 Maham Naeem Model Customs Collectorate of Appraisement & Facilitation-West, Karachi 8 965 Taimoor Tawseen Model Customs Collectorate of Appraisement & Facilitation-West, Karachi 9 563 Husna Sarfraz Model Customs Collectorate of Appraisement & Facilitation-East, Karachi 10 306 Sobia Noreen Model Customs Collectorate of Appraisement & Facilitation-East, Karachi 11 1093 Rashid Menhas Model Customs Collectorate of Exports (Port Muhammad Bin Qasim), Karachi 12 1151 Shah Khalid Model Customs Collectorate of Exports (Port Muhammad Bin Qasim), Karachi 13 118 Ghulam Rasool Model Customs Collectorate of Exports, Customs House, Karachi 14 927 Noman Saleem Model Customs Collectorate of Exports, Customs House, Karachi The FBR said that their seniority will be maintained in order of merit assigned by Federal Public Service Commission (FPSC) and in accordance with the Civil Servants (Seniority) Rules, 1993. Other terms and conditions of their service will be the same as already conveyed vide FBR letter dated January 25, 2021.
The officers have been advised to join the concerned Customs field formation mentioned against their names immediately but not later than March 26, 2021.
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FBR asks taxpayers to update profile for avoiding penal action
ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday asked taxpayers to update their profile by March 31, 2021 to avoid penal action.
The FBR said: “Statutory deadline for furnishing/updating of taxpayers’ profile under section 114A of the Income Tax Ordinance, 2001 is March 31, 2021. Please update your profile before the deadline in order to avoid penal consequences under the law.”
Updating profile by all the taxpayers registered under Section 181 of the Income Tax Ordinance, 2001 and other conditions specified by the Federal Board of Revenue (FBR) is a mandatory requirement under Section 114A of the Ordinance.
Through Finance Act, 2020, the Section 114A was introduced to make the updating profile mandatory for following persons:
(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.
The FBR explained the newly introduced section as: “Complexity of return forms is an embodiment of the complexity of tax law. Nevertheless, there is a dire need to simplify return forms without compromising on data required to verify accuracy of the declared version.”
The FBR said that instead of endeavoring to obtain all the relevant information in the income tax return, a new section has been added wherein taxpayers profile may be prescribed in order to capture data relevant to the taxpayer.
It said that persons who are already registered before September 30, 2020 and are deriving business or incomes subject to final taxation, trusts, welfare institutions, non-profit organizations and such other persons prescribed by the FBR are proposed to file a profile on or before December 31, 2020, which is not extended up to March 31, 2021.
Persons who obtain their registration after September 30, 2020 are proposed to furnish such profile within 90 days of registration. In case of any change in particulars of information, such persons shall update their profile within 90 days of the change in particulars. The profile contains information relevant to income regarding bank accounts, utility connections, business premises including all manufacturing, storage or retail outlets operated or leased by the taxpayer, types of businesses and such other information as may be prescribed by the FBR.
The FBR said that if a person fails to furnish or update a taxpayer’s profile within the due date or time period as extended by the FBR under Section214A, such person shall not be included in the active taxpayers list for the latest tax year ending prior to the aforesaid due date or extended date.
However, upon filing or updating the profile, such persons shall be allowed to be placed on the active taxpayers list upon payment of surcharge which is Rs20,000 in the case of a company, Rs10,000 in the case of an association of persons and Rs1,000 in the case of an individual.
Further, a penalty for non-filing or not updating of profile is also proposed at the rate of Rs2,500 for each day of default subject to minimum penalty of Rs10,000.
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FBR adds 116,801 names to active taxpayers list
ISLAMABAD: Federal Board of Revenue (FBR) has added around 116,801 taxpayers to the updated Active Taxpayers List (ATL) for tax year 2020 issued on Monday.
The FBR updates the ATL on every Monday on a weekly basis. The revenue body issued new ATL for tax year 2020 on March 01, 2021. The recent list is the first update to the new ATL.
The total number of active taxpayers in the new ATL – 2020 issued a week was 2,178,463. The weekly updated ATL issued on March 08, 2021 is carrying names of around 2,295,264 active taxpayers.
The appearance of taxpayers’ name on the ATL guarantees exemption from withholding tax on various transactions and reduction of withholding tax rate.
The FBR includes names of only those taxpayers, who file their annual returns within due date or it was extended by commissioner appeals on the basis of request filed by the taxpayers.
However, late filers can also enlist their names on the ATL after payment of surcharge.
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Computation of taxable income defined
Income Tax Ordinance, 2001 has explained procedure for computation of taxable income.
The Income Tax Ordinance, 2001 updated up to June 30, 2020 issued by the Federal Board of Revenue (FBR), explained COMPUTATION OF TAXABLE INCOME under Sections 9, 10 and 11 of the ordinance.
9. Taxable income.—The taxable income of a person for a tax year shall be the total income under clause (a) of section 10 of the person for the year reduced (but not below zero) by the total of any deductible allowances under Part IX of this Chapter of the person for the year.
10. Total Income.— The total income of a person for a tax year shall be the sum of the —
(a) person’s income under all heads of income for the year; and
(b) person’s income exempt from tax under any of the provisions of this Ordinance.
11. Heads of income.— (1) For the purposes of the imposition of tax and the computation of total income, all income shall be classified under the following heads, namely: —
(a) Salary;
(b) Income from Property;
(c) Income from Business;
(d) Capital Gains; and
(e) Income from Other Sources.
(2) Subject to this Ordinance, the income of a person under a head of income for a tax year shall be the total of the amounts derived by the person in that year that are chargeable to tax under the head as reduced by the total deductions, if any, allowed under this Ordinance to the person for the year under that head.
(3) Subject to this Ordinance, where the total deductions allowed under this Ordinance to a person for a tax year under a head of income exceed the total of the amounts derived by the person in that year that are chargeable to tax under that head, the person shall be treated as sustaining a loss for that head for that year of an amount equal to the excess.
(4) A loss for a head of income for a tax year shall be dealt with in accordance with Part VIII of this Chapter.
(5) The income of a resident person under a head of income shall be computed by taking into account amounts that are Pakistan-source income and amounts that are foreign-source income.
(6) The income of a non-resident person under a head of income shall be computed by taking into account only amounts that are Pakistan-source income.
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Taxpayers require to update profile by March 31 to avoid exclusion from ATL
ISLAMABAD: Taxpayers are required to update their profile by March 31, 2021 to avoid exclusion their names from Active Taxpayers List (ATL).
The last date for updating the profile was December 31, 2020. However, it was extended up to March 31, 2021.
Updating profile by all the taxpayers registered under Section 181 of the Income Tax Ordinance, 2001 and other conditions specified by the Federal Board of Revenue (FBR) is a mandatory requirement under Section 114A of the Ordinance.
Through Finance Act, 2020, the Section 114A was introduced to make the updating profile mandatory for following persons:
(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.
The FBR explained the newly introduced section as: “Complexity of return forms is an embodiment of the complexity of tax law. Nevertheless, there is a dire need to simplify return forms without compromising on data required to verify accuracy of the declared version.”
The FBR said that instead of endeavoring to obtain all the relevant information in the income tax return, a new section has been added wherein taxpayers profile may be prescribed in order to capture data relevant to the taxpayer.
It said that persons who are already registered before September 30, 2020 and are deriving business or incomes subject to final taxation, trusts, welfare institutions, non-profit organizations and such other persons prescribed by the FBR are proposed to file a profile on or before December 31, 2020, which is not extended up to March 31, 2021.
Persons who obtain their registration after September 30, 2020 are proposed to furnish such profile within 90 days of registration. In case of any change in particulars of information, such persons shall update their profile within 90 days of the change in particulars. The profile contains information relevant to income regarding bank accounts, utility connections, business premises including all manufacturing, storage or retail outlets operated or leased by the taxpayer, types of businesses and such other information as may be prescribed by the FBR.
The FBR said that if a person fails to furnish or update a taxpayer’s profile within the due date or time period as extended by the FBR under Section214A, such person shall not be included in the active taxpayers list for the latest tax year ending prior to the aforesaid due date or extended date.
However, upon filing or updating the profile, such persons shall be allowed to be placed on the active taxpayers list upon payment of surcharge which is Rs20,000 in the case of a company, Rs10,000 in the case of an association of persons and Rs1,000 in the case of an individual.
Further, a penalty for non-filing or not updating of profile is also proposed at the rate of Rs2,500 for each day of default subject to minimum penalty of Rs10,000.
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KTBA recommends daily update of ATL file; banks not relying on online verification
KARACHI: Karachi Tax Bar Association (KTBA) has advised the Federal Board of Revenue (FBR) to update Active Taxpayers List (ATL) on daily basis instead weekly as banks were not relying on the online verification of the active taxpayers for purpose of withholding tax deduction.
The KTBA on Saturday said that many taxpayers are making payment of surcharge U/s.182A of the Income Tax Ordinance, 2001 (Ordinance) for inclusion of their names in the ATL and upon the payment the status of taxpayer is immediately updated in the ATL on the web portal.
However, the excel file available on the FBR web portal of is not being updated which is causing severe problems to the taxpayers as far as withdrawals from banks are concerned.
“The banks are not relying on the online verification available on the web portal of FBR,” the KTBA said.
The KTBA suggested that the excel file (lists) available on the web portal of FBR is updated on daily basis and the banks are also informed to rely on the online verification before withholding deducting the tax on banking transactions in order to facilitate the taxpayers.
The tax bar said that it had received many complaints that where manual extensions were filed/submitted and where no reply was received (whether granted or refused) and the returns were filed within the time applied for; the names of such taxpayers are also not appearing in the ATL though such cases are liable to be treated as filed within the time allowed.
The KTBA advised that where taxpayers have filed the manual extensions within time and where the returns have been filed within the time applied for, the names of such taxpayers should be included in the ATL and the ATL be updated immediately without payment of surcharge as prescribed U/s.182A of the Ordinance.
There are several instances where the taxpayers have opted rightly to file their returns, in time, manually (paper returns) as they were legally not bound to file their returns electronically, their names are also not appearing in the ATL for which we are being informed by our members continuously. We feel that the manual returns have not been digitized and such taxpayers are facing severe problems due to non-appearance of their names in the ATL.
The tax bar suggested that where taxpayers have rightly filed/submitted their returns manually (paper turns), the names of such taxpayers should be included in the ATL forthwith for their facilitation.
The KTBA also received complaints from members and have also noticed that there are instances where extension applications have been submitted via IRIS within time and the same are appearing in the outbox of IRIS unattended by the concerned Commissioners and the returns have also been filed within the time applied for but their names are not appearing in the ATL.
The tax bar said that there is no fault of the taxpayers who have filed the extensions in time that remains unattended and the returns have also been filed within the time applied for.
It suggested that where taxpayers have applied for extensions on IRIS in time, whose applications have remained unattended and the returns have been filed within the time, the names of such taxpayers should also be included in the ATL forthwith for their facilitation
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FBR signs contract to launch track and trace system from July 01
ISLAMABAD: Federal Board of Revenue (FBR) on Friday signed a contract with AJCL along with its lead partner Authentix Inc. USA and Mitas Corporation of South Africa to operationalize Track and Trace Solution on Tobacco, Cement, Sugar and Fertilizer Sectors.
Dr. Muhammad Ashfaq Ahmed, Member (IR-Operations), FBR, Kevin McKenna, CEO, Authentix, Sten Bertelsen, from Mitas Corporation and Omer Jaffer CEO of AJCL signed the Contract on behalf of their respective organizations.
The track and trace Solution is scheduled to be rolled out across the tobacco, cement, sugar and fertilizer sectors from July 01, 2021 in Pakistan.
This system will enhance tax revenue, reducing counterfeiting and prevention of smuggling of illicit goods.
Track and Trace involves implementation of a robust, nationwide, electronic monitoring system of production volumes by affixation of more than 5 billion tax stamps on various products at the production stage, which will enable FBR to track the goods throughout the supply chain.
Dr. Muhammad Ashfaq Ahmed, Member (IR-Operations), FBR on the occasion said that FBR shall be working closely with AJCL Consortium during the rollout of the program across different industries on very aggressive timelines.
Kevin McKenna of Authentix stated that the program would help provide a transformational boost to the local economy, enhance revenue and make the tax collection process more transparent.
CEO AJCL, remarked that the Consortium was looking forward to working with FBR to configure and implement the various components of the solution.
Around 45million tons of cement, more than 4 billion sticks of tobacco cigarettes, more than 4million tons of sugar and more than 30 million tons of fertilizer would be brought into the tax net.
This will enhance digitization of economic activity, improve revenue forecasting and curb counterfeit products in the market.
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Large number of taxpayers denied active status
ISLAMABAD: Pakistan Tax Bar Association (PTBA) has informed the Federal Board of Revenue (FBR) that a large number of taxpayers who have file returns but their names are not on the new Active Taxpayers List (ATL), which was issued on March 01, 2021 for tax year 2020.
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