Pkrevenue.com

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.

  • FBR finalizes return form for small manufacturers after filing expiry date

    FBR finalizes return form for small manufacturers after filing expiry date

    ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday issued a simplified single-page income tax return form for small manufacturers a day after when the last date for filing income tax return was expired.

    The FBR issued SRO 1316(I)/2020 dated December 09, 2020 to notify the simplified income tax return form for individuals and Association of Persons (AOPs) having annual turnover less than Rs50 million.

    Previously, the FBR issued the draft of this form on November 26, 2020 through SRO 1261(I)/2020 for seeking feedback from stakeholders.

    The FBR issued the finalized return form for the small manufacturers for tax year 2020. Interestingly, the date for tax year 2020 has been expired on December 08, 2020 except for the corporate units which have due date for return filing till December 31, 2020.

    So far the date for return filing was not further extended beyond December 08, 2020. But it is strong believe that the date may be extended to allow small manufacturers to file return under the newly notified return form.

    Tax experts said that the FBR may not allow date extension for small manufacturers without extending the date for all taxpayers who have last return filing date on September 30 and extended up to December 08, 2020.

    They said that the FBR had allowed general extension in date for filing tax return at the time of tax amnesty in the past.

    The simplified return form of income has been issued for small scale manufacturers having turnover less than Rs50 million. A single page draft wealth statement form is also issued along with the draft return of income.

    In the draft return form, the manufacturers would be required to provide limited information about their earnings and expenditures during a year.

    The details, as per draft return of income, to be provided by the manufacturers are included: gross sale excluding sales tax and federal excise duty; cost of sales; opening stock; purchases (domestic/imports); closing stock; other direct expenses; gross profit; profit and loss expenses; total income; tax chargeable; tax payable; tax already paid through utility bills; net tax payable/refund etc.

    Similarly, the taxpayer shall require to provide details, as per draft wealth statement form, are included: immovable assets; manufacturing unit; moveable assets; business capital; investment/advance; cash in hand/bank; loan/liabilities; net assets; reconciliation of net assets; net assets current year; net assets previous year; increase/decrease in net assets; income as per return; other inflows (gift, loan, remittances, etc.); outflows (gift, loan etc.); and personal expenses.

  • Date for filing income tax returns may be extended

    Date for filing income tax returns may be extended

    ISLAMABAD: The government may announce an extension in last date for filing return of income and wealth statement for tax year 2020, sources said.

    Today i.e. Tuesday December 08, 2020 is the last date for filing income tax returns for tax year 2020. As per Income Tax Ordinance, 2001 the last date for filing tax return is September 30. However, this year the income tax return form was finalized on September 08, 2020 and as per law taxpayers should be provided statutory time limit of 90 days. Therefore, the Federal Board of Revenue (FBR) on the demand of tax bars and other stakeholders, extended the date by 90 days in one go.

    This 90-day period is expiring today and the FBR has made it clear that it will not further extend the date as statutory time limit had already been granted.

    Tax bars and business community are continuously pressing the tax authorities to extend the date as online portal IRIS was making miscalculation.

    The sources in FBR said it was agreed at the Board level that the deadline would not be extended further in order to stop the tradition of repeated extension and to ensure compliance by due date.

    However, they said that the stakeholders including business community had approached the Prime Minister through the advisor on finance to intervene and allow a reasonable time for filing the annual return.

    A large number of returns have already been filed on the FBR portal, especially the salaried persons conveniently filed their returns through wizard based application. To some estimates around half of the returns filers, who filed their returns for tax year 2020, has made compliance by evening of Monday December 07, 2020.

    Therefore, to accommodate a number of around 1.5 million on the last date is impossible. The FBR issued instructions to the field offices to facilitate the taxpayers seeking date extension through commissioner approval. Further, the FBR also allowed extension to many taxpayers through one application.

    Tax experts said that the date extension through commissioner approval was already available in the Income Tax Ordinance, 2001 and by this way this issue may not be resolved and there is need to allow general relaxation in timing.

    One of the major issues creating hurdles is significant increase in coronavirus cases. Due to resurgence of COVID the government and private sector have already slashed the work force to the half. In this scenario the return filing process through tax consultants/practitioners and third party filing may be affected.

    Pakistan Tax Bar Association (PTBA) in its letter on December 02, 2020 urged the tax authorities to extend the last date for filing income tax returns up to January 31, 2020 after considering the significant rise in coronavirus cases in the country.

    Many other issued highlighted by taxpayers and other stakeholders including calculation errors on the IRIS portal. The FBR sources said that these issues were discussed and most of those were resolved.

    The sources said that extension in date may be announced later today evening.

  • FBR decides releasing missing amounts of sales tax refunds

    FBR decides releasing missing amounts of sales tax refunds

    ISLAMABAD: Federal Board of Revenue (FBR) on Monday decided to release missing amounts of sales tax refunds that were stuck up due to design flaws in the Fully Automated Sales Tax e-Refunds (FASTER) System.

    In this regard the FBR issued Sales Tax Circular No. 03 of 2020 to prescribe standard procedure for sanctioning of missing amounts stuck in FASTER system due to system glitches.

    The FBR said that in the wake of rollback of zero-rating extended through SRO 1125 of 2011 issued under Section 3(2)(b) and (6); 8(1)(b); and 71 of the Sales Tax Act, 1990 with effect from January 01, 2012, the FASTER system was introduced to process and sanction exporters’ refunds expeditiously.

    Although, FASTER was rolled out inside the very first quarter of tax year 2020, yet it continued to malfunction on multiple counts producing suboptimal outcomes, the FBR added.

    “One evidence of FASTER’s malfunctioning was that the system would simply miss out on sales tax credits of various taxpayers stalling processing of their refund claims,” the FBR said, adding that this system glitches created problems for exporting taxpayers in terms of uncertainty and stuck-up liquidity, and for the tax administration in terms of credibility deficit.

    The FBR said that the matter was analyzed threadbare at the head office, and found out that the problem of missing amounts cropped up due to the very designing of the FASTER module plausibly on three counts, namely:

    (i) FASTER was programmed to pick the least of the three opening balances of carry forward of previous month from (a) sales tax return; (b) Annex-H; and (c) the e-RPO generated;

    (ii) FASTER module’s non-synchronization with STRIVE i.e. Serial 7a and 7b of the Sales Tax Return; and

    (iii) Misapplication of section 8b to certain exporters in FASTER module.

    “These design flaws resulted in wide-going anxiety amongst the exporters’ community as large number of missing amounts claimed by them was not being reflected on their e-RPO after processing by the system,” the FBR said, adding that the matter having two dimensions, that is, improving the system design for future glitch –free processing of refund claims in FASTER, and devising a mechanism to deal with the past missing amount cases expeditiously and judiciously, has been resolved as follows:

    (i) Future Processing Module

    The problem of opening balance has been overcome by de-linking the opening balance of Sales Tax Return and Annex – H effectively, and linking it to the previous e-RPO alone. Going forward, this improvement in the FASTER module will not only solve the issue of missing amounts arising due to opening balances but also the issue of non-synchronizing of FASTER system with the Sales Tax Return and application of Section 8B on certain exporters.

    (ii) Process of Past Missing Amounts

    The issue of past missing amounts has been solved as under:

    (a) That, in all cases wherein the missing amounts could be effectively pulled up by the system, have already been communicated to taxpayers for re-filing after adequate modifications in the refund claims/sales tax return;

    (b) That, in all remaining cases, where a taxpayer believes that a material amount of his refund claims has been unaccounted for, he may apply to the Deputy Commissioner concerned; and

    (c) That, the deputy commissioner will examine the case and after due verification, will sanction the due amount.

    The FBR directed chief commissioners concerned to keep a complete log of the pending missing amount refund cases in their formations and ensure their disposal and processing in the shortest possible time as per law.

  • FBR disappoints return filing date extension seekers with new instructions

    FBR disappoints return filing date extension seekers with new instructions

    ISLAMABAD: Federal Board of Revenue (FBR) on Monday issued new instructions to its tax offices for extension in filing income tax returns in special cases.

    The new instructions have disappointed tax consultants, practitioners and business community, who approached the FBR with request to extend the last date for filing income tax return beyond December 08, 2020.

    As only one day is left for filing income tax return for tax year 2020 the FBR issued instructions to field offices to facilitate taxpayers in granting date extension provided that requests are filed with genuine reasons for non-compliance by due date.

    The FBR has already made it clear that it would not further extend the last date for filing income tax return beyond December 08, 2020 as statutory time of 90 days granted to taxpayers for making compliance.

    It is worth mentioning that Pakistan Tax Bar Association (PTBA) in its letter on December 02, 2020 urged the FBR to extend the last date up to January 31, 2020 due to multiple reasons. The primary reasons identified by the tax bar was miscalculation in tax rate for different taxpayers.

    Further, it also identified the extraordinary situation due to coronavirus which restricted workforce to half besides halting the working activities due to lockdown imposed in various parts of the country.

    However, the FBR on Monday issued instructions to all the field offices regarding manual receipt of applications for extension to file income tax return for tax year 2020.

    The FBR again clearly mentioned that it would not further extend the date for filing income tax returns for tax year 2020. However, as per the new instructions application may be filed manually to commissioner Inland Revenue covering many taxpayers for extension in date for filing tax returns.

    The FBR directed the tax offices:

    (i) That, every Inland Revenue field formation would establish a help desk to receive manual requests for extension;

    (ii) That, one request for extension addressed to chief commissioner Inland Revenue concerned could cover multiple taxpayers provide it contains taxpayers’ name; CNIC.NTN and identification of jurisdiction.

    (iii) That the option for filing online request for extension would also be available and can be availed to the maximum degree; and

    (iv) That, extension would be granted generously to the extent possible.

    The FBR further directed the chief commissioner to ensure proper receipt of all requests, grant of extension, and report the number of requests received, and the extension granted by December 10, 2020.

  • Persons not required to file return of income

    Persons not required to file return of income

    ISLAMABAD – Under the Income Tax Ordinance, 2001, there are specific categories of persons who are not required to file an annual income tax return, as clarified in Section 115 of the law. This provision offers relief to certain individuals based on humanitarian, age-related, or residency grounds.

    (more…)
  • Taxpayers entitled to get date extension for filing tax return, wealth statement

    Taxpayers entitled to get date extension for filing tax return, wealth statement

    ISLAMABAD: Taxpayers, who are unable to file income tax return and wealth statement by due date, are entitled to get date extension under tax laws by submitting application with genuine reasons.

    The Federal Board of Revenue (FBR) a day earlier issued instructions to all the chief commissioners of Inland Revenue that it would not extend the date for filing income tax return and wealth statement beyond December 08, 2020.

    However, on the other hand tax bars and taxpayers are highlighting pressing issues such as calculation errors and many others on the IRIS portal making it difficult for filing income tax returns.

    Since only three days are left for the last date for filing income tax return for tax year 2018 i.e. December 08, 2020, and the FBR so far is not showing flexibility, those taxpayers, who believe they would not able to comply with the due date, should prepare themselves for submitting applications to concerned Commissioner IR to seek date extension.

    Section 119 of the Income Tax Ordinance, 2001 allows taxpayers to file an application with logical reasons to get date extension for filing income tax return and wealth statement.

    The Section 119 of the Ordinance is reproduced below:

    Section 119: Extension of time for furnishing returns and other documents

    (1) A person required to furnish —

    (a) a return of income under section 114 or 117;

    (d) a wealth statement under section 116,

    may apply, in writing, to the Commissioner for an extension of time to furnish the return, or statement, as the case may be.

    (2) An application under sub-section (1) shall be made by the due date for furnishing the return of income, or statement to which the application relates.

    (3) Where an application has been made under sub-section (1) and the Commissioner is satisfied that the applicant is unable to furnish the return of income, or statement to which the application relates by the due date because of —

    (a) absence from Pakistan;

    (b) sickness or other misadventure; or

    (c) any other reasonable cause,

    the Commissioner may, by order, in writing, grant the applicant an extension of time for furnishing the return, or statement, as the case may be.

    (4) An extension of time under sub-section (3) should not exceed fifteen days from the due date for furnishing the return of income, employer’s certificate, or statement, as the case may be, unless there are exceptional circumstances justifying a longer extension of time:

    Provided that where the Commissioner has not granted extension for furnishing return under sub-section (3) or sub-section (4), the Chief Commissioner may on an application made by the taxpayer for extension or further extension, as the case may be, grant extension or further extension for a period not exceeding fifteen days unless there are exceptional circumstances justifying a longer extension of time.

    (6) An extension of time granted under sub-section (3) shall not, for the purpose of charge of default surcharge under sub-section (1) of section 205, change the due date for payment of income tax under section 137.

  • No extension to return filing date; statutory time already given: FBR

    No extension to return filing date; statutory time already given: FBR

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday said that it has already given statutory time to taxpayers for filing income tax returns for tax year 2020.

    Therefore, no further date will be extended beyond December 08, 2020.

    The FBR in an office order intimated about the date for return filing to all the chief commissioners of Inland Revenue. However, the FBR said that taxpayers should be facilitated who request date extension explaining failure to comply with due date.

    According to the provision Section 114 of the Income Tax Ordinance, 2001, annual tax return is required to be filed by on or before September 30 every year implying a period of 90 days to taxpayers to discharge their legal obligation.

    This year, since new income tax return form was uploaded on IRIS on September 08, 2020, the deadline for filing of the tax return was extended through Circular No. 04 of 2020 on September 30, 2020 till December 08, 2020, allowing the citizens full statutorily – mandated time of 90 days in one go; piecemeal repeated extensions compromise tax administration’s credibility and adversely affect taxpayers’ perception for the future, the FBR said.

    The FBR further said that provisions of Section 119(I) of the Ordinance stipulates that a “person required to furnish a tax return under Section 114 … may apply, in writing, to the Commissioner for an extension of time to furnish the return.”

    Since the date of filing of tax returns for the tax year 2020, being December 08, 2020 is retained as the final date for the purpose, it is absolutely necessary that commissioners should grant extension in all cases of hardship of any nature.

    In order to render the entire process of filing for extension and granting of time to taxpayers for filing of tax returns, IRIS is being modified to make it facilitative and less time-consuming, according to the office order.

    The Chief Commissioners have been directed to be fully vigilant and ensure that no requests for extension remain unattended in their jurisdiction.

  • KTBA declares online income tax return form as defective

    KTBA declares online income tax return form as defective

    KARACHI: Karachi Tax Bar Association (KTBA) on Thursday declared the available income tax return form at IRIS – the web portal of Federal Board of Revenue (FBR) – as defective and taxpayers are unable to file their returns for tax year 2020.

    “Needless to state that the return of income is still defective and incomplete as certain fields are missing to date. The time prescribed of 90 days under Section 118 to file return will not start until all defects in the return of income are completely removed and the return is error free and taken to have been finalized,” the KTBA said in a letter sent to the FBR chairman.

    It is pertinent to mention here that the last date for filing income tax returns for tax year 2020 was September 30, 2020. The FBR finalized the return form on September 08, 2020. On the demand of tax bars the FBR extended the last date by 90 days to December 08, 2020.

    The tax bar further said that to incorporate/correct certain fields/errors, appropriate Rules needs to be amended which can only be made through a notification as required under section 237(3) of the Income Tax Ordinance, 2001, the KTBA added.

    Muhammad Zeeshan Merchant, President, KTBA in its letter to the FBR chairman said that the incorrect computational issues in the return of income still persist and members were facing severe difficulties and were in extreme pressure because of two main situations, which are:

    (1) they cannot file the returns on the forms presently available on the IRIS, with wrong formulas, calculating erroneous tax; and

    (2) resurgence of the currently ongoing, since many past days, the dangerous life threatening second wave of COVID-19 which has not only gripped the taxpayers but have also affected the members of KTBA in particular and tax consultants in general and their staff.

    The KTBA through its letter explained in detail about the incorrect computation of tax under various heads of income.

    The tax bar said that the members were working very hard during such extraordinary extreme and testing time, however, due to non-removal of above irritants and rising COVID-19 cases, the members are unable to file their returns of income which could transpire in low number of returns that have been filed till date.

  • PRAL issues cyber security advisory for FBR officials working from home

    PRAL issues cyber security advisory for FBR officials working from home

    ISLAMABAD: Pakistan Revenue Automation (Pvt) Limited (PRAL) has issued cyber security advisory for officials of Federal Board of Revenue (FBR), who are working from home in the wake of resurgence of coronavirus.

    In its advisory issued on Thursday, the PRAL said that switching to remote working because of the ongoing coronavirus pandemic can create cyber security problems for an organization like FBR and its employees.

    Attackers are exploiting the situation, so look out for phishing emails, scams and other hacking attempts.

    “A new type of phishing attack is rising which is focusing on coronavirus (COVID-19). Adversaries’ sends phishing & spam emails to users to open the infected word document claiming an update report from World Health Organization (WHO) of Pakistani Health Authorities.”

    Therefore, all FBR resources who are authorized by the competent authority to Work From Home are directed to adhere to the following strategy points:

    01. Avoid public Wi-Fi networks and use PRAL recommended VPN for secure communications.

    02. Use of remote desktop software such as Teamviewer, Anydesk, etc. are strictly prohibited.

    03. Make sure you are using a secure connection for your work from home environment.

    04. Keep password strong and change it regularly. Always memorize the password, never write it.

    05. Enable two factor (2FA) or multi-factor authentication, wherever possible.

    06. Encrypt your home PC hard drive and USB sticks to safe data in case of theft.

    07. Keep your home PC operating system patched. Install & update your home PC with top-rated antivirus, anti-malware and firewalls. You may also get latest freeware antivirus and other security software from PRAL technical support team.

    08. Check all security software is up to date in your home PC. Privacy tools, add-ons for browsers and other patches need to be checked regularly.

    09. All work from home resources are advised to communicate using official FBR email only.

    10. All FBR remote workers are advised to be suspicious of any emails asking them to check or renew their password and login credentials, even if they seem to come from a trusted source.

  • FBR needs to collect Rs3,275 billion in seven months to achieve annual target

    FBR needs to collect Rs3,275 billion in seven months to achieve annual target

    ISLAMABAD: Federal Board of Revenue (FBR) is required to collect Rs3,275 billion in remaining seven months to meet the revenue collection target for the current fiscal year.

    The FBR has been assigned to collect Rs4,963 billion as revenue collection target for the fiscal year 2020/2021.

    The FBR provisionally collected Rs1,688 billion during first five months (July – November) 2020/2021, according to details made available on Tuesday.

    The collection during the first five months of the current fiscal year however above the target of Rs Rs1,669 billion for the period.

    The revenue collection during July-November (2020-2021) also witnessed an increase of over 4 percent as compared to the collection of Rs1,623 billion in the corresponding period of the last fiscal year.

    According to the breakup figures, the Income Tax collection during the period under review was recorded at Rs 577 billion.

    Similarly, collection of Sales Tax, Federal Excise Duty, Customs Duty remained at Rs 743 billion, Rs 104 billion and Rs 264.4 billion, respectively.

    The FBR collected gross revenue of Rs 1,773 billion during the first five months compared to the collection of Rs1,664 billion last year, showing an increase of Rs109 billion in the current year.

    Meanwhile, during the month of November 2020, the FBR collected revenues Rs 347 billion against the target of Rs 348 billion.

    Meanwhile, during the first five months of current fiscal year, refunds to the tune of Rs 80 billion were issued against Rs41 billion last year. The refunds helped in boost economic activity in the country.

    The refunds issued during the month of November this year were recorded at over Rs17 billion which were Rs4 billion in the corresponding month last year.

    Despite increase in refunds, FBR still managed to cross the revenue collection of November last year.

    During the first five months of current Fiscal Year, smuggled goods worth Rs27 billion were seized as compared to seizures of Rs18 billion during the corresponding months of 2019.

    According to an FBR press statement, the board’s appreciable performance was despite the fact that the economy had been sluggish in the wake of on-going COVID-19 pandemic.

    Moreover, the government had extended significant tax relief measures to the public in the Finance Act, 2020.

    The statement added that the board was fully geared towards automation, e-audit, and simplification of procedures, e-payment of duty draw back so as to add to Ease of Doing Business (EoDB).

    The board launched a single page simplified Income Tax Return for SME manufacturers and also upgraded IRIS system for issuing SMS and e-mails whenever any notice was issued or any assignment is created by Tax Officer.

    The FBR launched a system Maloomat-TaxRay wherein taxpayers’ can access all information available with the FBR by logging through a secure mechanism.

    This feature has been launched in mobile app, Tax Assan, so that taxpayers’ can easily access all such information.

    They had appealed the taxpayers to avail these facilitative measures and ensure filing Annual Income Tax Returns by the last date i.e. December 8, 2020.