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 imposes up to seven percent additional customs duty

ISLAMABAD: Federal Board of Revenue (FBR) has started preparation for achieving revenue collection target for fiscal year 2020/2021 as it massively increased additional customs duty up to 7 percent from July 01, 2020.

The FBR issued SRO 572(I)/2020 on Tuesday for levying additional customs duty at different rates of two percent, four percent and seven percent.

The FBR provisionally collected Rs3.957 trillion for fiscal year 2019/2020. As per budget documents the FBR has been assigned to collect Rs4,963 billion during the fiscal year 2020/2021, which is around 25 percent higher than collection of fiscal year 2019/2020..

The government while presenting the budget 2020/2021 had claimed that the budget was tax free and it had not levied any duty and tax in order to provide relief to the masses amid outbreak of coronavirus.

However, as per the notification additional customs duty at two percent has been imposed on goods imported under tariff slabs of zero percent, three percent and 11 percent.

Another rate of four percent additional customs duty has been levied on goods imported under tariff slab of 16 percent.

While the rate additional customs duty at seven percent has been applied on goods imported under tariff slab of 20 percent and above.

However, import of edible crude oil which are subject to import at higher tariff slab, the additional customs duty shall be charged at the rate of two percent, the FBR said.

The FBR further said that additional customs duty would not be applicable on the goods imported under concessionary regime for exporters.

Further, the additional customs duty shall also not be applicable on the contractors and services companies for offshore projects.

June 30, 2020
FBR surpasses fiscal year 2019/2020 collection target

ISLAMABAD: Federal Board of Revenue (FBR) has surpassed revenue collection target of Rs3,907 billion for fiscal year 2019/2020, which was significantly lower due to coronavirus adverse impact on the economy.

FBR official spokesman on Tuesday said that the tax authorities had surpassed the downward revised target of Rs3,907 billion and collected Rs3,957 billion be Tuesday evening.

The spokesman said that the gross collection of the FBR also recorded above Rs4,000 billion for the first time in the history. The collection is considerably high considering the adverse impact of coronavirus.

The collection in the month of June 2020 also recorded at Rs411 billion by 3:00PM on June 30, 2020 as against the June target of Rs398 billion.

It is important to note that the FBR had lost around 30 officials due to the pandemic, which also included a grade 22 officer Muhammad Zahid Khokhar.

The FBR praised its officials for their dedication toward revenue collection despite threat of COVID.

June 30, 2020
FBR grants Rs30 billion as tax concession to new business entities

ISLAMABAD: Federal Board of Revenue (FBR) has granted Rs30 billion as initial allowance to new business entities during fiscal year 2019/2020.

The concession of allowance has been granted under Section 23 of Income Tax Ordinance, 2001.

As per Section 23 the allowance has been granted as:

Section 23. Initial allowance.—

Sub-Section (1): A person who places an eligible depreciable asset into service in Pakistan for the first time in a tax year shall be allowed a deduction (hereinafter referred to as an “initial allowance”) computed in accordance with sub-section (2), provided the asset is used by the person for the purposes of his business for the first time or the tax year in which commercial production is commenced, whichever is later.

Sub-Section (2): The amount of the initial allowance of a person shall be computed by applying the rate specified in Part II of the Third Schedule against the cost of the asset.

[The rate of initial allowance under section 23 shall be 25 percent for plant and machinery.]

Sub-Section (3): The rules in section 76 shall apply in determining the cost of an eligible depreciable asset for the purposes of this section.

Sub-Section (4): A deduction allowed under this section to a leasing company or an investment bank or a modaraba or a scheduled bank or a development finance institution in respect of assets owned by the leasing company or the investment bank or the modaraba or the scheduled bank or the development finance institution and leased to another person shall be deducted only against the leased rental income derived in respect of such assets.

(5) In this section, “eligible depreciable asset” means a depreciable asset other than —

(a) any road transport vehicle unless the vehicle is plying for hire;

(b) any furniture, including fittings;

(c) any plant or machinery that has been used previously in Pakistan; or

(d) any plant or machinery in relation to which a deduction has been allowed under another section of this Ordinance for the entire cost of the asset in the tax year in which the asset is acquired.

The FBR granted a sum of Rs36.43 billion as allowances including the initial allowance during fiscal year 2019/2020.

Under Section 23A an amount of Rs335 million has been granted as first year allowance under the head of industrial undertaking set up in specified rural and under developed areas or engaged in the manufacturing of cellular mobile phones.

An amount of Rs477 million has been granted concessions under Section 60 of the Income Tax Ordinance, 2001 for persons paying Zakat.

The FBR granted concession of Rs2.45 billion under Section 60A for persons paying Workers’ Welfare Fund. Another amount of Rs2.72 billion has been granted as allowance under Section 62B for persons paying workers’ participation fund.

An amount of Rs285 million has been granted as allowance under Section 60C for individuals paying profit or share in rent and share in appreciation for value of house on loan by banks etc.

The FBR granted Rs154 million as deductible allowance for education expenses under Section 60D.

June 30, 2020
FBR issues rules for processing duty drawback claims

ISLAMABAD: Federal Board of Revenue (FBR) on Monday issued draft rules for processing duty drawback claims in order to speedy repayment of exporters.

The FBR issued SRO 561(I)/2020 to amend Customs Rules, 2001 for processing and sanctioning of duty drawback claims.

The FBR said that the claims of duty drawback shall be sanctioned by the Customs if the same are complete in all respect and on first in first out (FIFO) basis.

However, comprehensive audit of duty drawback would be carried out by the Directorate General of Post Clearance Audit (PCA) of the FBR.

Any recovery detected by the PCA may be deducted from the next duty drawback claim of the exporter besides initiating recovery proceedings under the recovery rules.

The duty drawback payment of such claims that are complete in all respects shall be made on FIFO basis taking into account the date of filing of claim.

A consolidated discrepancy report shall be sent by the collectorate to State Bank of Pakistan (SBP) on monthly basis. The SBP shall also send a scroll of all the duty drawback payments made to the exporters.

For calculating amount of customs duties paid at the time of import, past six months import data may be used taking the average quantity or value of each class or description of the materials, including packing materials, from which a particular class or description of goods is ordinarily produced or manufactured. Average exchange rates of the same period may be taken into consideration.

The average amount of customs duties paid on imported materials used in the manufacturing of components, intermediate or semi-finished products which are exported as such or further used for manufacture of goods shall be taken into account for the purpose of calculation of the duty drawback.

The average amount of customs duties paid at the effective rate on the imported input materials shall be calculated for the last six months import data.

The average FOB (freight on board) value of each class or description of the goods exported during the last six months may be taken into consideration for the class or description of goods for which export drawback rates are being determined.

On requisition by the relevant association, director general may furnish trade statistics pertaining to each class or description of imported or exported goods for the past six months on the basis of which export drawback rates need to be determined.

At the time of submitting an application, the association shall specify the complete calculation in accordance with the method of calculation as the FBR may notify and shall also furnish therewith the worksheets.

The Director General may initiate exercise for determination of duty drawback rates on its own motion where it is found that: duty drawback rates have not been determined; where already determination rates have changed due to amendments in tariffs.

June 30, 2020
FBR grants Rs45 billion customs duty exemption under free trade agreements

In a significant move to bolster trade and economic relationships, the Federal Board of Revenue (FBR) has granted Rs45 billion in customs duty exemptions and concessions on imports under various Free Trade Agreements (FTAs) and Preferential Trade Agreements (PTAs) for the fiscal year 2019/2020.
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June 29, 2020
FBR to get information of all persons entering, leaving Pakistan for broadening of tax base

KARACHI: Federal Board of Revenue (FBR) will get access to information of all persons entering or leaving Pakistan from federal investigation agency and bureau of emigration for the purpose of broadening of tax base.
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June 27, 2020
FBR urged to allow time extension making audit notice compliance

KARACHI: Pakistan Tax Bar Association (PTBA) has urged the tax authorities to allow time extension to taxpayers for making compliance in audit notices of tax year 2014.

In a letter sent to Ms. Nausheen Javaid Amjad, Chairperson, Federal Board of Revenue (FBR) on Friday, the PTBA urged to grant an extension of time under Section 214A of the Income Tax Ordinance, 2001 to complete the amendment of assessment proceedings for the tax year 2014 in order to provide sufficient time to taxpayers for compliance of such notices issued by the department in the best possible interest of the taxpayers at large.

The apex tax bar said that it had been brought to the notice that the officers of Inland Revenue had initiated amendment of assessment proceedings by issuing various notices under Section 177/174/176/122 of the Ordinance, ibid in the last month of June 2020 to the taxpayers for the year 2014 as the said tax year is going to be time barred as on June 30, 2020 under Section 122(2) of the Income Tax Ordinance, 2001.

Furthermore, the said notice have been issued with a short margin of only 2-3 days for compliance (which is not possible) and the officers are also reluctant to allow sufficient time to the taxpayers and their respected authorized representatives to respond against the notices in order to finalize it till June 30, 2020 to achieve budgetary targets by the end of this month.

The tax bar said: “This, once again, put the credibility of the FBR officials in question as there were six years available to those officers to complete the assessment proceedings after filing of income tax returns for the tax year 2014 but the department has been slept over all this time and now suddenly awake just to show efficiency by issuing such vague notices in order to complete the proceedings before it gets time barred.”

The PTBA informed the FBR chairperson that it had been held in a number of judgments as well as many directions had been given from time to time by the board to the officials to provide sufficient time/opportunity to the taxpayers to defend their case and provide sufficient explanation before an adverse order is passed against them. “But this has not been adhered to in the prevailing situation as the officers of FBR are busy in achieving their budgetary targets as well as to show their efficiency at the end of the financial year.”

Hence, such notices issued by the department not only torment the taxpayers but also lacks confidence of the taxpayers / consultants upon the department, it added.

“Nevertheless, the current pandemic situation of COVID-19 prevailing all over the country where many of the businesses and areas are still in lockdown situation, the taxpayers are unable to reach their as well as FBR offices to respond such notices issued by the department in such a short compliance period.”

June 27, 2020
Customs collectorates to observe extended working hours on June 29-30

KARACHI: Federal Board of Revenue (FBR) on Friday said that the collectorates of Customs will observe extended working hours on June 29 and 30, 2020 to facilitate trade and business in payment of duty and taxes.

The FBR said that all filed offices of customs will remain open and observe extended working hours till 10:00 PM on June 29, 2020 (Monday) and till 12:00 midnight on June 30, 2020 (Tuesday) for collection of duty and taxes.

The FBR directed chief collectors of Customs to establish liaison with the State Bank of Pakistan (SBP) and authorized branches of National Bank of Pakistan (NBP) to ensure transfer of the duty and taxes collected by these branches on June 30, 2020 to the respective branches of State Bank of Pakistan on the same date so as to account for the same towards collection for the month of June 2020.

June 26, 2020
Cash withdrawal should be exempted from withholding tax; Senate recommends key changes in Finance Bill 2020

ISLAMABAD: The Senate of Pakistan has recommended the government to abolish withholding tax on cash transactions from banks. In its key tax recommendations for finalizing budget 2020/2021, the Senate recommended that the government should abolish all kinds of withholding tax chargeable on cash transactions from banks.
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June 26, 2020
CRTO Karachi initiates recovery of reward amount from 42 officials

KARACHI: The Chief Commissioner Inland Revenue of Corporate Regional Tax Office (CRTO)-Karachi started recovery of reward amount that was sanctioned to the officials beyond authorized approval.

In an official notices issued by Mushtaque Ali Wagan, Additional Commissioner (HQs) asked 42 officers and officials of the CRTO Karachi to deposit the sanctioned amount in government treasury through State Bank of Pakistan or National Bank of Pakistan within two days from the issuance of the letter i.e. June 24, 2020.

The recovery has been initiated after detection that the then Chief Commissioner-IR, CRTO Karachi sanctioned stipend, incentives, awards and allied to the following officers of the CRTO without consultation of the Federal Board of Revenue (FBR):

01. Imran Ali Sheikh, Additional Commissioner-IR, CRTO Karachi

02. M. Masood Ahmed Gorsi-IR, Additional Commissioner-IR, CRTO, Karachi.

03. Kashif Hafeez, Additional Commissioner-IR, CRTO, Karachi.

04. Naseer Ahmed, Additional Commissioner-IR, CRTO, Karachi.

05. Karim Bukhsh Bughio, Additional Commissioner-IR, CRTO, Karachi.

06. Ms. Maryam Habib, Additional Commissioner-IR, CRTO, Karachi.

07. Ms. Uzma Saqib, Additional Commissioner-IR (now CIR), CRTO, Karachi.

08. Mushtaque Ali, Additional Commissioner-IR, CRTO, Karachi.

09. Sardar Temur Khan Durrani, Additional Commissioner, IR, CRTO, Karachi.

10. Mamoon Moazam Khuhwar, Additional Commissioner-IR, CRTO, Karachi.

11. Muhammad Babar Chohan, Additional Commissioner-IR, CRTO, Karachi.

12. Tariq Hussain Maitlo, Deputy Commissioner-IR, CRTO, Karachi.

13. Tarique Aziz, Deputy Commissioner-IR (now ADC), CRTO, Karachi.

14. Gobind Kumar, Deputy Commissioner-IR, CRTO Karachi.

15. Mansoor Wisal, Deputy Commissioner-IR, CRTO Karachi.

16. Ms. Kalpana, Deputy Commissioner-IR, CRTO, Karachi.

17. Ms. Laila Malik Sher, Deputy Commissioner-IR, CRTO Karachi.

18. Aminullah Kakar, Deputy Commissioner-IR, CRTO Karachi.

19. Ms. Rashida Khalil, Deputy Commissioner-IR, CRTO Karachi.

20. Muhammad Haider, Assistant Commissioner-IR, CRTO Karachi.

21. Usama Amin, Assistant Commissioner-IR, CRTO Karachi.

22. Muhammad Naveed, Assistant Commissioner-IR, CRTO Karachi.

23. Sajid Khan, Assistant Commissioner-IR, CRTO Karachi.

24. Shahid Nawaz, Assistant Commissioner-IR, CRTO Karachi.

25. Baqar Ali, Assistant Commissioner-IR, CRTO Karachi.

26. Masroor Ahmed, Assistant Commissioner-IR, CRTO Karachi.

27. Darshan Lal, Assistant Commissioner-IR, CRTO Karachi.

28. Abbas Jan Muhammad, IRO, CRTO Karachi.

29. Zulfiqar Ali Khokhar, Assistant Director (Audit), CRTO Karachi.

30. Yousuf Bashir, IRO, CRTO Karachi.

31. Muhammad Arshad, IRO, CRTO Karachi.

32. Mukesh Kumar, IRO, CRTO Karachi.

33. Muhammad Shahid Rehan, Senior Auditor, CRTO Karachi.

34. Qadeer Ahmed, MIS Officer, CRTO Karachi.

35. Ahsan Ali Bhutto, APS, CRTO Karachi.

36. Syed Salman Shah, Inspector-IR, CRTO Karachi.

37. Muhammad Raza, Inspector-IR, CRTO Karachi.

38. Ms. Khalida Begum, APS, CRTO Karachi.

39. Ali Muhammad, Inspector-IR, CRTO Karachi.

40. Sajid Anwar, Inspector-IR, CRTO Karachi.

41. Muhammad Daniyal Pervez, Inspector-IR, CRTO Karachi.

42. Muhammad Amin, Inspector-IR, CRTO Karachi.

The Chief Commissioner of CRTO through a notice issued June 16, 2020 notified that the then chief commissioner sanctioned reward to following officers of CRTO Karachi exceeding value of six salaries:

01. M. Masood Ahmed Gorsi, Additional Commissioner, Rs2.57 million

02. Imran Ali Shaikh, Additional Commissioner, Rs930,120

03. Tarique Aziz, Deputy Commissioner, Rs2.83 million

04. Ms. Kalpana, Deputy Commissioner, Rs388,900

05. Mansoor Wisal, Deputy Commissioner, Rs527,000

06. Zulfiqar Ali Khokhar, Assistant Director (Audit), Rs521.730

June 25, 2020