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.

Defaulting sales tax payment may liable to three-year jail

ISLAMABAD: A person fails to pay sales tax within due date or to comply with recovery order is liable to certain fine and penalty under Sales Tax Act, 1990, officials in Federal Board of Revenue (FBR) said on Tuesday.

Any person who fails to deposit the amount of tax due or any part thereof in the time or manner laid down under Sections 3, 6, 7 and 48 of this Act or rules or orders made there under:

“Such person shall pay a penalty of ten thousand rupees or five per cent of the amount of the tax involved, whichever is higher:

“Provided that, if the amount of tax or any part thereof is paid within ten days from the due date, the defaulter shall pay a penalty of five hundred rupees for each day of default:

“Provided further that no penalty shall be imposed when any miscalculation is made for the first time during a year:

“Provided further that if the amount of tax due is not paid even after the expiry of a period of sixty days of issuance of the notice for such payments by an officer of Inland Revenue, not below the rank of Assistant Commissioner Inland Revenue, the defaulter shall, further be liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to three years, or with fine which may extend to amount equal to the amount of tax involved, or with both. “

January 12, 2021
Rules notified for taxpayers profile update

ISLAMABAD: Federal Board of Revenue (FBR) on Monday notified rules for making it mandatory for taxpayers to update their profiles through IRIS portal.

The FBR issued SRO 13(I)/2021 dated January 08, 2021 to amend Income Tax Rules, 2002. Through the SRO the FBR notified online format for taxpayers to update profile.

Previously, the FBR issued SRO 1341(I)/2020 on December 16, 2020 for notifying draft rules related to taxpayers profile update.

A new rule 34B has been proposed for taxpayer’s profile. The FBR said that this rule shall apply for the purpose of section 114A of the Income Tax Ordinance, 2001, which provides for the furnishing of a taxpayer’s profile.

A taxpayer’s profile shall be filed electronically on the prescribed format and manner as provided on IRIS web portal.

The taxpayer’s profile shall be verified in the manner specified on IRIS web portal.

Through Finance Act, 2020 a new section 114A was inserted to Income Tax Ordinance, 2001 for making it mandatory for taxpayers to update their profile.

Following is the text of Section 114A:

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).

The FBR on December 30, 2020 extended the last date for updating taxpayers profile up to March 31, 2021.

January 11, 2021
Taxpayers urged to use electronic payment facility

ISLAMABAD: Federal Board of Revenue (FBR) has urged the taxpayers to avail electronic mode of payment for duty and taxes. The e-payment facility has been introduced for convenient and hassle free payment, said a statement issued on Monday.

In continuation of FBR reforms and modernization drive, E-Payment facility for payment of all FBR taxes as well as some provincial taxes has been introduced for convenient and hassle free payment.

On the one hand, traders can electronically pay all import duties and taxes through Customs computerized system WeBOC at ports and border stations across Pakistan.

While on the other hand, taxpayers can also electronically pay income tax, sales tax and Federal Excise duty sitting in their homes.

E-Payment system provides round the clock facility to taxpayers and traders to make online payment of customs duties and other FBR taxes as well as provincial cess and stamp duty.

The facility is available through internet and mobile banking by using more than 15000 ATMs of 16000 Over the Counters (OTC) bank branches of commercial banks spreading across the country.

The taxpayers’ confidence and interest in E-payment is growing fast and it can be gauged from the fact that the proportion of number of E-payments of Income Tax, Sales Tax and Federal Excise Duty has increased from 6.26 percent of total payments during July to December 2019 to 40.5 percent during same period of 2020.

Similarly the proportion of amount deposited in these E-payments has increased from 13.55 percent of total payments to 76.5 percent during the comparative periods.

E-payment facility has greatly helped the traders and other taxpayers’ during the COVID pandemic since all transactions can be completed without physical interaction.

Currently 18.6 percent of import duties and taxes are being collected by Pakistan Customs through E-Payment system. More than 80,000 consignments consisting of nearly 22 percent of total imports were cleared in WeBOC through E-Payment in the last 6 months.

Apart from major Customs stations including Karachi, Lahore, Islamabad and Peshawar, the facility is also being availed by importers in remote areas like Taftan and Khunjerab.

FBR urges the traders and other taxpayers to utilize E-Payment facility as it reduces their cost of doing business and contributes significantly towards improving the ease of doing business.

It also expedites the clearance of goods, enhances transparency in the duty payment mechanism and ensures timely revenue reconciliation. Acknowledging E-payment as a major step towards trade facilitation, World Trade Organization’s Trade Facilitation Agreement also promotes the use of electronic payment methods amongst the traders.

FBR has launched an awareness campaign to enhance the use of E-payment facility. In this regard, a number of seminars have been conducted to educate trade bodies and Customs Agents about the benefits of E-Payment. The traders can also take benefit of the FAQs section relating to E-payment available on the WeBOC web page.

January 11, 2021
Income tax return filing touches new peak at 3.03 million

ISLAMABAD: Income tax return filing hit record high at 3.03 million for tax year 2019, according to weekly Active Taxpayers List (ATL) updated on Monday.

The FBR issued the weekly ATL – 2019 updated on the basis of returns filed up to January 10, 2021.

The ATL-2019 will remain applicable till February 28, 2021 as the FBR will issue new ATL for tax year 2020 on March 01, 2021.

The return filers including salaried persons, business individuals, Association of Persons (AOPs) and companies can check their names on the ATL by visiting How to check ATL status?

The filing of income tax return is mandatory for persons driving taxable income or specified under Section 114 of Income Tax Ordinance, 2001.

The appearance of names on the ATL is only possible after filing income tax returns within due date. In case persons are not on the ATL then the rate of withholding tax shall be increased by 100 percent on various transactions.

Persons fail to file their returns by due date but file after the date will also not qualify to enlist their name on the ATL until fine is not paid to the Federal Board of Revenue (FBR).

A taxpayer should check his/her status on the ATL before making transactions in order to avail reduced rate of tax rates.

January 11, 2021
FBR launches mega crackdown against illegal petrol pumps
ISLAMABAD: Federal Board of Revenue (FBR) has launched massive crackdown against illegal petrol pumps from Monday (January 11, 2021) on the directives of Prime Minister Imran Khan.

Prime Minister Imran Khan in a recent meeting directed the FBR and relevant authorities to initiate harsh action illegal petrol pumps selling smuggled petroleum products.

The FBR in this regard wrote letters to Chief Secretaries of all the provinces, chairman Oil and Gas Regulatory Authority (OGRA), Inspector General of all the provinces and chief collectors of Pakistan Customs about initiating the crackdown from January 11, 2021.

The FBR is going to launch action including on-ground checking and scrutiny of requisite documentary enforcement team during operation with the help of Pakistan Customs, District Administration, Police etc.

A FBR notification said that during the course of operation the enforcement teams would enquire from the owner/manager of the retail outlet to present following documents:
1. Oil Marketing Companies (OMC) authorization/dealership
2. Form-K
In case of non-production of requisite documents, following further steps shall be taken by the team:
1. Failure to produce both these documents shall render the outlets ‘illegal and unauthorized’ and the POL products present there shall be deemed to have been smuggled or illegally acquired as per The Customs Act, 1969, The OGRA Ordinance, 2002 and Rules made thereunder.
2. Inventorization of POL will be carried out as per details given in para 6.
3. Customs officials shall serve the owner/manager of the POL outlet notices under Section 3(kk) and Section 26 of the Customs Act, 1969 to bring forth any legal document establishing the legality of the sale outlet within 7 days.
4. In case, no one is available at the premises, the notices shall be posted on the doors/walls of the office/building.
5. After service of notice under Section 2(kk), the POL products will be deemed ‘detained’ pending production of requisite documents by the owner, if any and its verification by customs.
6. The illegal POL outlet will be sealed by District Administration as per para 5(c) and Police force shall be deployed immediately to safeguard the detained goods and premises till the finalization of the proceedings.
In case, the process of documentary scrutiny or in the absence of any lawful document, confirms that the petrol pumps, outlet is illegal, the district administration shall seal the premises of the petrol pump under Section 43A of Pakistan Petroleum (Refining, Blending and Marketing) Rules, 1971 made by Minister of Petroleum.

In case, if the premises of illegal outlet has been closed or found abandoned but it has been used previously as illegal petrol station, the same shall be sealed and the owner/manager shall be proceeded against by District Administration for violation of The Petroleum Act, 1934, the OGRA Ordinance, 2002 and Rules made thereunder.
January 11, 2021
Three years imprisonment for sales tax registration failure

ISLAMABAD: A person who makes taxable supplies but fails to get sales tax registration shall be liable to pay fine and penalties besides the person is also liable to imprisonment up to three years.

Sources in the Federal Board of Revenue (FBR) said that the tax offices had launched operations to identify persons making taxable supplies but are not in the sales tax net.

The sources said that under Sales Tax Act, 1990, any person who is required to apply for registration under the Act fails to make an application for registration before making taxable supplies:

“Such person shall pay a penalty of Rs10,000 or five percent of the amount of tax involved, whichever is higher;

“Provided that such person who is required to get himself registered under this Act, fails to get registered within sixty days of the commencement of taxable activity, he shall, further be liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to three years, or with fine which may extend to an amount equal to amount of tax involved, or with both.”

Section 14 of the Sales Tax Act, 1990 requires a person to get registration under this Act, who is making taxable services.

Following is the tax of the Section 14:

Section 14: Registration

(1) Every person engaged in making taxable supplies in Pakistan, including zero-rated supplies, in the course or furtherance of any taxable activity carried on by him, falling in any of the following categories, if not already registered, is required to be registered under this Act, namely:-

(a) a manufacturer who is not running a cottage industry;

(b) a retailer who is liable to pay sales tax under the Act or rules made thereunder, excluding such retailer required to pay sales tax through his electricity bill under sub-section (9) of section 3;

(c) an importer;

(d) an exporter who intends to obtain sales tax refund against his zero-rated supplies;

(e) a wholesaler, dealer or distributor; and

(f) a person who is required, under any other Federal law or Provincial law, to be registered for the purpose of any duty or tax collected or paid as if it were a levy of sales tax to be collected under the Act.

(2) Persons not engaged in making taxable supplies in Pakistan, if required to be registered for making imports or exports, or under any provisions of the Act, or any other Federal law, may apply for registration.

(3) The registration under this Act shall be regulated in such manner as the Board may, by notification in the official Gazette, prescribe.

January 9, 2021
Committee to review tax structure for stock market

ISLAMABAD: Federal Board of Revenue (FBR) on Friday set up a consultative committee to review tax structure for stock market.

The FBR constituted the consultative committee on capital markets tax reforms, which comprising following members:

Member Inland Revenue Policy, FBR as chairman

Shauzab Ali, Commissioner Securities Market Division, SECP as Member

Farrukh H. Khan, Chief Executive Officer, PSX as Member

Ahmed Ali Mitha, Chief Financial Officer, PSX as Member

Chief (Income Tax Policy), FBR as Secretary.

According to the terms of reference for the committee, it shall act as a forum till budget making exercise for the year 2021/2022, to review tax policies and suggest specific short-term and medium to long term measures for the development of debt and equity market, commodity futures, mutual funds, REITs, corporate and insurance sector, amongst others.

Broadly it will review and recommend all measures that impinge upon the capital markets and its stakeholders.

The committee may invite proposals from relevant stakeholders, deliberate and finalize tax reforms in the aforementioned areas.

The proposals shall be categorized into immediate, medium term and long-term reforms and shall accordingly be prioritized.

First report of the committee shall be submitted to the FBR within 20 days of its constitution.

The FBR said that necessary amendments to the tax laws shall be initiated in consultation with the committee for implementation of the agreed proposals.

January 8, 2021
Customs officials promoted to post of principal appraisers

ISLAMABAD: Federal Board of Revenue (FBR) on Friday notified promotions of appraising officers and assistant private secretary of Pakistan Customs Department to the post of principal appraisers (BS-16) with immediate effect until further orders.

FBR notified promotions of following officers:

01. Khalid Hassan Awan posted at Directorate General Transit Trade, Karachi.

02. Salman Ahmed posted at Model Customs Collectorate (MCC) Appraisement and Facilitation (East) Karachi.

03. Aijaz Ahmed Butt posted at MCC Appraisement and Facilitation (East), Karachi.

04. Rana Insaram Rabbani posted at MCC Export, Customs House, Karachi.

05. Ejaz Ahmed posted at MCC Appraisement and Facilitation (East), Karachi.

06. Muhammad Khalid posted at MCC Appraisement and Facilitation (West), Karachi.

07. Nasir Ahmed posted at MCC Export, Customs House, Karachi.

08. Mirza Irfan Baig posted at MCC Appraisement and Facilitation (East) Karachi.

09. Zaka ullah posted at MCC Export, Customs House, Karachi

10. Muhammad Zaman Khan Tarar posted at MCC Allama Iqbal International Airport, Lahore.

11. Muhammad Ashfaq Ghouri posted at Post Clearance Audit (Central), Lahore.

12. Arshad Nazir posted at Post Clearance Audit (Central), Lahore.

13. Sarfraz Ahmad posted at MCC Islamabad.

14. Faiz Muhammad Awan posted at MCC Appraisement and Facilitation, Lahore.

15. Syed Muhammad Jaffar posted at Post Clearance Audit (Central) Lahore.

16. Shahzad Malik posted at MCC Appraisement and Facilitation, Lahore.

17. Dost Mohammad posted at Directorate General of Intelligence and Investigation, Customs, Karachi.

18. Naveed Iqbal Cheema posted at MCC Enforcement and Compliance, Lahore.

19. Muhammad Qadeer Khan posted at MCC Export Karachi.

20. Ijaz Ahmed Siddiqui posted at Post Clearance Audit (Central) Lahore.

21. Khurram Rafique posted at MCC Appraisement and Facilitation (East) Karachi.

22. Zia Hassan posted at MCC Islamabad.

23. Miraj Muhammad posted as Assistant Private Secretary, MCC Exports, Karachi.

The FBR said that the promotions of the officers would take effect from the date of their joining, subject to the condition that no disciplinary proceedings/inquiry was pending against them.

The promoted officers will be on probation for a period of one year, extendable for further period, not exceeding one year, provided that if no order is issued by the day following the termination of probationary period, the appointment shall deem to be held until further order.

The officers already drawing performance allowance equal to 100 percent of basic pay will continue to draw it on their promotion.

January 8, 2021
FBR constitutes committee for tax return form simplification

ISLAMABAD: Federal Board of Revenue (FBR) on Friday constituted a committee for simplification of income tax return for Tax Year 2021.

As a part of various reform initiatives and in pursuance to the special instructions of the Prime Minister of Pakistan, FBR chairman has constituted a committee for timely designing/finalization and simplification of Income Tax Return forms for individuals, AOPs and companies for tax Year 2021.

While departing from the previous practice, the FBR aims at designing the return forms in much advance so that forms are available to the taxpayers on the very first day of the tax year.

The committee shall be chaired by Member (IR-Policy) whereas Chief Information Officer, Chiefs of Inland Revenue Operations & Inland Revenue Policy and Second Secretary, Domain Business Team (DBT) of FBR’s Information Technology Wing would be members of the committee.

The committee aims at simplifying the income tax return forms to the best possible extent besides developing the return forms that require least possible interventions on year to year basis. International best practices shall be a guiding principle for the committee.

The idea behind this endeavor is to facilitate the taxpayers’ and make the income tax return form more user-friendly and free from unnecessary complications.

In order to make this initiative more fruit bearing and result oriented, FBR through a separate communication has requested the ICAP, ICMAP, Pakistan Tax Bar Associations and various Chambers of Commerce and Industry to give their input for designing a simplified version of the returns.

January 8, 2021
Customs to confiscate properties acquired through proceeds of smuggling

ISLAMABAD: Customs authorities have been empowered to confiscate properties that are acquired through proceeds of smuggling.
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January 8, 2021