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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.

  • Rate of capital gains tax on disposal of securities

    Rate of capital gains tax on disposal of securities

    KARACHI: Following is the rate of capital gains tax on disposal of securities after the amendment made through Finance Act, 2020.

    Officials at the Federal Board of Revenue (FBR) said that the rate of capital gains tax had been kept unchanged for tax year 2021 and subsequent years.

    cgt on disposal of securities.jpg

    Provided that the rate of tax on cash settled derivatives traded on the stock exchange shall be 5 percent for the tax years 2018 to 2020.

    Provided that the rate for companies shall be as specified in Division II of Part I of First Schedule, in respective of debt securities;

    Provided further that a mutual fund or a collective investment scheme or a REIT scheme shall deduct Capital Gains Tax at the rates as specified below, on redemption of securities as prescribed, namely:—

    CategoryRate
    Individual and association of persons10 percent for stock funds 10 percent for other funds
    Company10 percent for stock funds 25 percent for other funds

    Provided further that in case of a stock fund if dividend receipts of the fund are less than capital gains, the rate of tax deduction shall be 12.5 percent:

    Provided further that no capital gains tax shall be deducted, if the holding period of the security is more than four years.”

    Explanation.- For removal of doubt, it is clarified that, the provisions of this proviso shall be applicable only in case of a mutual fund or collective investment scheme or a REIT scheme.

  • Persons not on ATL to pay advance tax on educational fee

    Persons not on ATL to pay advance tax on educational fee

    ISLAMABAD: Persons not appearing on Active Taxpayers List (ATL) are liable to pay advance income tax at the time of paying educational fee.

    Officials at Federal Board of Revenue (FBR) said that through Finance Act, 2020 the condition of paying advance tax under Section 236I of Income Tax Ordinance, 2001 on educational fee had been abolished for persons appearing on ATL.

    However, those persons not appearing on ATL shall remain required to pay advance income tax on payment of educational fee.

    Similarly, the educational institutions are required to provide details of those persons who are not ATL and making fee above Rs200,000 per annum.

    The rate of collection of tax under section 236I shall be 5 percent of the amount of fee for persons not appearing on ATL.

    The collection of advance income tax on payment of educational fee was introduced through Finance Act, 2013. The purpose of introducing the advance tax on such transaction was to bring those people into tax net who have taxable income but not paying their tax liability.

    The FBR officials said that after changes brought through Finance Act 2020, only those persons who are not on the ATL shall pay advance income tax.

    However, this tax shall be adjustable against income tax liability in case that person files his income tax return and ensure his name on the ATL.

  • LTU Karachi to hold e-Katcheri on July 24

    LTU Karachi to hold e-Katcheri on July 24

    KARACHI: Large Taxpayers Unit (LTU) Karachi will hold e-Katcheri on July 24, 2020 for efficient service delivery and ensure public trust.

    The program has been launched in compliance with the directive of the prime minister to conduct e-Khuli Katcheri to stay in contact with the public by all available means and provide them accessible platform to raise their issues for timely resolution.

    In this regard Badaruddin Ahmed Qureshi, Chief Commissioner Inland Revenue, LTUK Karachi will conduct e-Khuli Katcheri on Friday from 11:30 AM to 12:30 noon through Zoom video link.

    The taxpayers facilitation wing of the FBR recently circulated about the program directing that e-Katcheri would be conducted by every tier of FBR in the second week of every month on regular basis.

    The FBR directed all the tax offices to ensure that all proceedings of the e-Katcheri are property recorded and tasks should be assigned to concerned officers accordingly.

    The tax offices have also been directed to submit performance report on the outcome of the meeting with public.

    In the wake of COVID-19, the tax authorities shall conduct one e-Katcheri at all tiers of FBR in the second week of every month. In the backdrop of COVID-19, only e-Katcheris shall be conducted for the time being until normalcy of the situation.

  • Banks, exchange companies no more required to give details of remittances sent abroad for education

    Banks, exchange companies no more required to give details of remittances sent abroad for education

    ISLAMABAD: Federal Board of Revenue (FBR) shall not ask banks and exchange companies to provide details of persons sending remittances abroad related to education.

    Through Finance Act, 2020, the Section 236R of Income Tax Ordinance, 2001 has been omitted. This section was introduced for collection of advance tax on education related expenses remitted abroad.

    This section was introduced through Finance Act 2015 under which banks, financial institutions, foreign exchange companies or any other person responsible for remitting foreign currency abroad shall collect advance tax at the rate of five percent from the payer of education related expenses.

    Tax collected under the section was adjustable against the income of the person remitting payment of education related expenses.

    The section defined “education related expenses” as tuition fee, boarding and lodging expenses, any payment for distant learning to any institution or university in a foreign country and any other expense related or attributable to foreign education.

    This section was an important source of gathering information of those persons having taxable income in Pakistan and sending foreign exchange abroad taking advantage of education expenses.

    Under Section 165 of Income Tax Ordinance, 2001, withholding agents are required to provide details of persons including CNIC, NTN and addresses, whose tax was deducted at the time of transaction.

    However, deletion of this section the banks and exchange companies would no more required to share details of persons who are sending foreign exchange abroad for education related expenses.

  • FBR promotes 106 IRS officers to BS-18

    FBR promotes 106 IRS officers to BS-18

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday promoted 106 officials of Inland Revenue Service (IRS) to BS-18 on regular basis and acting charge basis with immediate effect.

    The following BS-17 officers of IRS are promoted to BS-18 on regular basis with immediate effect:-

    1. Ms. Sadeea Nadeem

    2. Ali Ahsan Warraich

    3. Ms. Mahwash Sami *

    4. Muhammad Hussain Shah

    5. Muhammad Zeeshan

    6. Ms. Alvina Fatima

    7. Ms. Kiran Zahra

    8. Ms. Alia Khurshid

    9. Amir Yasin

    10. Ms. Madiha Batool

    11. Ms. Saira Khan

    12. Amir Aslam

    13. Ms. Seemab Zafar

    14. Ms. Sana Ghous

    15. Ms. Angel David

    16. Ms. Romesa Tahir

    17. Arsalan Khan

    18. Hammad Hussain Jaffari

    19. Syed Faizan Ali Zaidi

    20. Muhammad Mauz Zafar

    21. Muhammad Hussnain Shamim

    22. Usman Azam Bhatti

    23. Ghulam Hussain Yassir

    24. Malik Samiullah Khan *

    25. Faizan Ahmad

    26. Ms. Anum Tahir

    27. Muhammad Naveed

    28. Gobind Kumar

    29. Adnan Jabbar

    30. Zahoor Ahmad

    31. Waseem Ahmed

    32. Ms. Shaista

    33. Waqar Ahmed

    34. Ghufran Syed

    35. Muhammad Nasir Javid *

    36. Dr. Aneela Javed Gondal *

    37. Syed Nasir Jamal Shah

    38. Mohsin Ihsan

    39. Ms. Rosheen Hussain Syed

    40. Muhammad Qamar Minhas

    41. Ejaz Qaisar

    42. Akhtar Saleem

    43. Kamran Shahab

    44. Usman Sadiq

    45. Muhammad Kashif Ahmad

    46. Muhammad Siddique

    47. Khawar Yaqoob

    48. Muhammad Ansir Ali khan

    49. Talib Hussain

    50. Suhbat Ali Sahto

    51. Shahid Nawaz

    52. Syed Abaid ur Rehman

    53. Atif Nawaz Warriach

    54. Muhammad Nadeem Asad

    55. Muhammad Shah Jahan Durrani

    56. Ms. Hina Mustafa

    57. Wazir Ahmad Khushik

    58. Zufiqar Ali Memon

    59. Javed Alam

    60. Anees Ahmad

    61. Ms. Tabinda Shaheen

    62. Roshan Ali

    63. Ms. Sorath Sadiq Chandio

    64. Muhammad Jamshed Khan

    65. Muhammad Naeem Afzal Khan

    66. Sanaullah

    67. Abdul Waheed Awan

    The FBR said that the officers shall actualize their regular promotion to BS-18 at their present place of posting.

    The officers at Sr. Nos. 03, 24, 35 & 36 will actualize their promotion to BS-18 from the date they return from deputation and join FBR (Hq), Islamabad.

    The following BS-17 officers of Inland Revenue Services are appointed in BS-18 on acting charge basis with immediate effect:-

    1. Hayat Omer Malik

    2. Ms. Tooba Ahmed Khan

    3. Ms. Saman Zahra

    4. Ms. Bushra Ranjha

    5. Ahmad Faiz

    6. Ms. Mehak Fatima

    7. Ms. Namra Ijaz

    8. Ms. Fatima Anjum

    9. Ray Muhammad Najam Nawaz Saqib

    10. Ms. Shahida Nazeer

    11. Muhammad Naeem Orakzai

    12. Ms. Rafia Nawaz Ranjha

    13. Usama Amin

    14. Ms. Komal Altaf

    15. Ms. Maheen Ali

    16. Ms. Rabia Haider Bokhari

    17. Kamran Hussain

    18. Muhammad Safian Adeel

    19. Sohail Anjum

    20. Ms. Farah Khan

    21. Shahzad Akbar

    22. Ms. Mehreen Yousaf

    23. Ali Raza Gilani

    24. Najam-ul-Hassan

    25. Ms. Sania Makhdoom

    26. Khan Muhammad

    27. Aamir Hussain

    28. Ali Khalid

    29. Ms. Samayya Qayyum

    30. Ms. Javeria Hayat

    31. Ms. Amna Sharif *

    32. Arsalan Ali

    33. Abdullah Zulfiqar

    34. Abdul Baseer Khan Khattak

    35. Ms. Sanam Rasool

    36. Ahmad Taimoor

    37. Usman Asif

    38. Rizwan Manzoor *

    39. Ms. Aqsa Gharshin

    The above officers shall actualize their appointment in BS-18 on acting charge at their present place of posting.

    The officers at Sr. Nos. 31 & 38 will actualize their appointment from the date they return from deputation and join FBR (Hq), Islamabad.

  • FBR abolishes regulatory duty on wheat import

    FBR abolishes regulatory duty on wheat import

    ISALAMABAD: Federal Board of Revenue (FBR) on Tuesday abolished regulatory duty on import of wheat in order to bring down domestic price of the commodity.

    The FBR issued SRO 633(I)/2020 in order to amend SRO 6809I)/2019 dated June 28, 2019.

    Through the SRO the FBR reduced the regulatory duty to zero from 60 percent.

    FBR sources said that the decision to abolish the regulatory duty was take to encourage import of the commodity in order to ensure buffer stock at home and maintain retail price at lower side.

  • Advance ruling for classification of goods implemented

    Advance ruling for classification of goods implemented

    ISLAMABAD: The law of advance ruling for classification of goods or determination of origin has been implemented through Finance Act, 2020 from July 01, 2020.

    The National Assembly has approved the law of advance ruling that was proposed through Finance Bill, 2020.

    According to explanation issued by PWC A F Ferguson Chartered Accountants, the concept of advance ruling presently there in the Customs Act, has been revamped.

    Previously, the mechanism is relevant only in respect of classification for assessment of duties on goods intended to be imported/ exported.

    Through the Finance Act 2020 the meaning and scope of advance ruling has been enhanced to include the determination of classification, origin, the applicability of particular relief/ exemption on goods and any other matter as Federal Board of Revenue (FBR) may specify.

    A new section 212B has been inserted to Customs Act, 1969 which stated:

    “212B. Advance Ruling –

    (1) An applicant desirous of Advance Ruling may make an application in such form and in such manner as may be prescribed under the rules, stating any of the questions as contained in sub-section (3) hereinafter on which the Advance Ruling is sought.

    (2) The question on which advance ruling is sought shall be in respect of.-

    (i) Classification of goods under the First Schedule to this Act;

    (ii) Determination of origin of the goods under the rules of origin notified for bilateral and multilateral agreements;

    (iii) Applicability of notification issued in respect of duties under this Act or any tax or duty chargeable under any other law for the time being in force in the same manner as duty of customs leviable under this Act; or

    (iv) Any other matter as the board [FBR] may specify by notification in the official Gazette.

    (3) The proceedings for issuance of advance ruling shall be completed within 90 days.

    (4) The Ruling issued under sub-section (1) shall be binding on the applicant.

    (5) The Ruling issued under sub-section (1) shall be binding on the Customs for a period of one year unless there is a change in law or facts or circumstances on the basis of which the advance ruling was pronounced.

    (6) The appeal against the Ruling issued under sub-section (1) shall lie with the Member Customs (Policy) within 30 days of issuance of the Ruling;

    Provided that during the appeal period of 30 days, the operation of the Ruling shall remain suspended unless the applicant accepts the Ruling.”

  • Big retail units to be sealed till integration with FBR

    Big retail units to be sealed till integration with FBR

    ISLAMABAD: Big retail units shall be sealed till their integration with the online system of the Federal Board of Revenue (FBR) for sharing sales and purchases.

    Sources in the Federal Board of Revenue (FBR) said that the big retail units are required to integrate their outlets with the FBR under Sales Tax Act, 1990.

    However, those retailers who failed to integrate their outlets with the FBR would face punitive action as defined in the statute.

    The sources said that through Finance Act, 2020 amendment has been made related to penalty for non-compliance for linkage of sales and purchase data with the FBR.

    According to amendment made to Sales Tax Act, 1990, any person, who is required to integrate his business for monitoring, tracking, reporting or recording of sales, production and similar business transactions with the board or its computerized system, fails to get himself registered under the Act, and if registered, fails to integrate in the manner as required under law.

    “Such person shall be liable to pay a penalty up to one million rupees, and if continues to commit the same offence after a period of two months after imposition of penalty as aforesaid, his business premises shall be sealed till such time he integrates his business in the manner as stipulated under sub-section (9A) of Section 3 or Section 40C, as the case may be.”

    All tier-1 retailers are required to integrate all their POSs with FBR’s computerized system.

    Tier-1 retailer is defined in section 2(43A) of the Sales Tax Act, 1990, to be a person who falls in any of the following categories:

    (a) a retailer operating as a unit of a national or international chain of stores;

    (b) a retailer operating in an air-conditioned shopping mall, plaza or centre, excluding kiosks;

    (c) a retailer whose cumulative electricity bill during the immediately preceding twelve consecutive months exceeds Rupees twelve hundred thousand;

    (d) a wholesaler-cum-retailer, engaged in bulk import and supply of consumer goods on wholesale basis to the retailers as well as on retail basis to the general body of the consumers; and

    (e) a retailer, whose shop measures one thousand square feet in area or more.

    The FBR extended date for retailers to integrate their Point of Sale (POS) up to August 31, 2020.

    The last date for integrating the POS for Tier-1 retailers was previously June 30, 2020.

    The FBR said that only those retailers can integrate their POS by August 31 who submit their intention to RTOs/LTUs by August 20, 2020.

    FBR sources said that the decision had been taken due to lockdown in the many parts of the country in order to prevent spread of coronavirus the business activities had become stand still.

    The deadline was expired on December 15, 2019 which was given by the FBR to tier-1 retailers to integrate their POSs with the FBR online system. However, the date was extended in order to give opportunity to big retailers to make compliance.

  • Import of heavy electric vehicles allowed at 1 percent customs duty

    Import of heavy electric vehicles allowed at 1 percent customs duty

    ISLAMABAD: Federal Board of Revenue (FBR) has allowed import of heavy electric vehicles at one percent customs duty.

    Through Finance Act, 2020 the duty at one percent has been made part of Customs Act, 1969.

    According to the Finance Act, 2020 the imports of electric buses, electric trucks and electric prime movers have been allowed at one percent of customs duty and there is no condition attach to the imports.

    However, imports of other electric vehicles including auto rickshaw, 3-wheeler loader and motorcycle have been allowed reduced duty rate at 50 percent of the prevailing tariff rate of customs duty as specified in the First Schedule to the Customs Act, 1969.

    There are conditions attached to the imports of such motor vehicles. The FBR said that the concession shall be admissible for a period of five years with effect from July 01, 2020, on import of 10 electric vehicles (CBU – Completely Buildup Unit) of the same variant to the assembled / manufactured to the extent of maximum 200 units, to 2-3 wheeler segment, duly approved / certified by the Engineering Development Board (EDB).

    The EDB shall monitor compliance with the EV Policy 2020 and intimate FBR immediately in case of violation by any manufacturer to stop further clearance at the concessional rate.

  • FBR recommended imposing penalty for late return filing instead extending last date

    FBR recommended imposing penalty for late return filing instead extending last date

    ISLAMABAD: Federal Tax Ombudsman (FTO) has advised the Federal Board of Revenue (FBR) to impose penalty for late filing of income tax returns instead extending the last date.

    The FTO in its annual report recommended that the FBR that instead of extending the last date for filing of Returns, late filing be allowed with certain penalty per month or any part of it, as it would be a more revenue-pro measure.

    The FTO further recommended that in order to encourage increase in filing of Returns by employees of government and autonomous bodies, it was recommended that FBR to approach the concerned Authorities/Establishment Division to issue instructions to heads of government Departments, autonomous bodies and large scale public sector organizations for obtaining certificate of filing of Returns by their employees falling in the tax net, at the end of last date of filing of Returns, and link their promotions/increments to filing of Returns.

    It was also suggested to devise mechanism in consultation with Securities and Exchange Commission of Pakistan (SECP) to ensure that business entities registered with SECP, who were non-filers, must file Income Tax Returns regularly.

    It was also recommended that proper assistance to the Return filers be provided through establishment of facilitation centres at convenient places.