In a decisive move to bolster transparency in financial transactions, the Federal Board of Revenue (FBR) is set to require all banks to provide detailed information on individuals receiving profit on debt, effective from July 1, 2020.
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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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Restoration of multiple years audit to burden taxpayers
KARACHI: Business community has criticized the government for eliminating condition of conducting audit once in three-year period.
Overseas Investors Chamber of Commerce and Industry (OICCI) highlighted anomalies in the Finance Bill 2020, sent to the Federal Board of Revenue (FBR) and said that omission of the condition would burden the taxpayers and would give sweeping powers to tax officials.
The Finance Act 2018 restricted the frequency of conducting audits to once in a three-year period.
This amendment of 2018 demonstrated the confidence of the Government on the records maintained by registered persons.
The Bill now seeks to omit the condition of conducting the audit once in a three-year period. If passed, this will unnecessarily burden taxpayers, while handing over sweeping powers to the assessing officers of Inland Revenue to conduct audits covering one or multiple tax years with no reprieve for the taxpayer available under the law, in absence of any prescribed limitation.
The consequence of this change will likely erode the taxpayer’s confidence in the revenue machinery and the probable unnecessary wastage of time and effort by the revenue authorities.
The OICCI said that during the FBR/OICCI Web link meeting on May 5th the FBR Member (IR-Operations) informed that new Audit Policy will be announced soon, where there will be only one audit in three years u/s 122, which was welcomed by OICCI members.
Therefore the removal of condition of one audit in three years in the Finance Bill 2020, is a shock for OICCI members.
“Hence, we strongly advocate maximum of one for audit within three years, for promoting Ease of Doing Business,” the OICCI said.
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Inland Revenue offices to observe extended working hours on June 29 – 30
ISLAMABAD: The offices of Inland Revenue have been directed to observe extended working hours on last two days of current fiscal year in order to facilitate taxpayers in payment of duty and taxes.
In an office order issued on Monday, the Federal Board of Revenue (FBR) said that all Large Taxpayers Units (LTUs), Corporate Regional Tax Offices (CRTOs) and RTOs would remain open and observe extended working hours till 9:00 PM on Monday June 29, 2020 and till 11:00PM on Tuesday June 30, 2020 to facilitate taxpayers in payment of duty and taxes.
The FBR directed chief commissioners to establish liaison with State Bank of Pakistan (SBP) and authorized branches of National Bank of Pakistan (NBP) to ensure transfer of tax collection by these branches on June 30, 2020 as per SBP’s letter dated June 18, 2020.
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FBR exempts duty, taxes on import of Remdesivir
ISLAMABAD: Federal Board of Revenue (FBR) on Monday exempt duty and taxes on import of antiviral drugs for prevention of coronavirus.
The FBR issued SRO 557(I)/2020 to exempt income tax on import of finished drug Remdesivir 100mg injection and injectable solution 100 mg vital.
A new section 12D has been inserted to Section 148 of Income Tax Ordinance, 2001 to provide relief on import of the drug.
Similarly, another SRO 558(I)/2020 has been issued by the FBR to exempt the import of finished drug Remdesivir 100 mg injection and injectable solution 100mg vial (PCT3004.9099) from whole of the customs duty and additional customs duty.
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Tax credit limit reduced by 50pc on charitable donations
ISLAMABAD: The limit of tax credit has been reduced by 50 percent on amount paid in cash or in kind to charitable donations, sources in Federal Board of Revenue (FBR) said.
The sources said that under the existing provisions of the last a person is entitled to tax credit on account of charitable donation paid in cash or in kind.
Currently such credit is allowed to the extent of lesser of: total amount donated in the year, including fair market value of any property given; or where the person:
(i) an individual or association of person, 30 percent of the taxable income of the person the year; or
(ii) a company, 20 percent of the taxable income of the person the year.
Deloitte Yousuf Adil, Chartered Accountants, said that the Finance Bill 2020 proposed to reduce the limit of credit by 50 percent in case of donations made to an associate as under:
(a) Total amount donated in the year, including fair market value of any property given; or
(b) Where the person:
(i) an individual or association of person, 15 percent of the taxable income of the person for the year; or
(ii) a company, 10 percent of the taxable income of the person for the year.
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Automated scrutiny of tax returns to end universal self assessment scheme
The Federal Board of Revenue (FBR) has introduced a significant policy shift through the Finance Bill 2020, proposing the automated scrutiny of all income tax returns, which may signal the end of the Universal Self-Assessment Scheme (USAS) in Pakistan.
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KTBA advises FBR to suspend notices amid alarming rise in COVID cases
KARACHI: Karachi Tax Bar Association (KTBA) has advised Federal Board of Revenue (FBR) to suspend notices for various tax matters with immediate effect considering the alarming increase in cases of COVID-19 in the country.
The KTBA in a letter to FBR chairperson sent on Friday, informed that the bar members were receiving notices issued by the tax officials right in the month of June when the COVID-19 pandemic was in its worst phase in the country, and the city of Karachi is passing through its hardest times.
The grim situation at hand, in terms of helplessness and number of deaths of both taxpayers and the tax officers, cannot possibly be remained devoid of any mindful sight.
It is rather what today has the fullest attention of everyone concerned and the FBR as the tax regulator cannot simply be an exception. It cannot keep shooting notices mindlessly to the taxpayers for tax compliance when the taxpayers or their counselors cannot even reach their offices these days. The Bar equally feels compassionately about officers. “You must be aware of the deaths of tax officials posted at LTU, Karachi and at Regional Tax Office, Karachi due to Coronavirus.”
Around 160,000 coronavirus positive cases have been registered in the country out of which, almost 55,000 are in Sindh. Among the cities of Sindh, Karachi is at the top with 45,000 plus cases.
Keeping the above in view, the number of notices being issued these days is beyond ones comprehension. The members, like other service providers (shops, markets and manufacturing units are an exception), are largely not operating from their offices and are working from home, which has its own limitations. As such, in these testing times, it is not humanly possible for our members to respond to the notices issued for various proceedings discuss below.
Even otherwise responding to these notices is not possible without provision of details/ information by clients/ taxpayers who are also suffering from the short comings discussed above. On the other hand, IRIS still has its own limitations.
Any assignment created especially in ‘completed tasks’ cannot be replied via IRIS. Even if a notice can be responded to via IRIS, attachments containing details beyond a specific size are not acceptable by IRIS i.e. not every notice can be responded to via IRIS.
This would mean that bar members have to come to the tax office for making the compliance. Under the present scenario of infections (tax offices are not immune from this), this poses a great threat for the visitors.
What has been observed that as a matter of fact, the notices, which are being issued can broadly been categorized under the following categories:
(i) Audit notices for the Tax Years 2015 to 2019
(ii) Audit notices for the TY 2014 including notices for making amendment under section 122(5) of the Income Tax Ordinance, 2001
(iii) Monitoring of withholding tax
(iv) Set-aside proceedings
(v) Appeal effect proceedings
For Audit notices relating to the Tax Years 2015 to 2019, the bar is of the view that there should not arise any issue of getting barred due to any time limitation. As such, these proceedings can well be taken up at a later stage as well, say after two to three months when gravity of the spread of Coronavirus will be subsided.
The notices for monitoring of withholding tax are again not poised with any time limitation issue.
As for the notices related to the set aside and appeal effect proceedings, it would be advisable to seek an advice from the Ministry of Law as to any possible waiver from the application of calculation of limitation period under the Income Tax Ordinance, 2001 read with Section 4 of the Limitation Act, 1908 for these extra ordinary days; alternatively, some moratorium should be asked for. This will be in utter necessity for saving precious lives from any jeopardy due to any insensitivity.
The tax bar urged the FBR to suspend the notices at least till the end of July 2020. Further that no adverse action would be taken on the notices already issued.
This is acutely necessary to defuse the tension in the atmosphere and for instilling the much-needed confidence in the taxpayers of the country towards the single most pivotal federal tax regulator of the country.
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So far 30 FBR officials die of coronavirus
ISLAMABAD: So far 30 officials of Federal Board of Revenue (FBR) have died of coronavirus, including a BS-22 officer of customs service.
This was disclosed by FBR in a statement issued on Friday.
It said that the FBR arranged a eulogy in remembrance of martyred officers and staff due to coronavirus / Covid-19.
On this occasion, Secretary Finance Naveed Kamran Baloch, Chairperson FBR Nausheen Javaid Amjad and other senior officers and officials of FBR participated in the eulogy.
Prayers were offered for the departed Muhammad Zahid Khokhar, a Pakistan Customs grade-22 officer and other officers and officials of FBR.
A special tribute was also paid by the participants on the services of the martyred officers and staff for the organization and country, who continued to work for the collection of revenue despite outbreak of corona virus throughout the country.
“So far, 30 employees of FBR have embraced martyrdom due to Covid-19. These officers and officials worked at FBR HQ and its Field Offices,” it said.
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FBR exempts sales tax on import of 61 medical equipments
ISLAMABAD: Federal Board of Revenue (FBR) on Friday announced sales tax exemption on import of 61 medical equipments, which are important to fight against COVID-19.
The FBR issued SRO 555(I)/2020 to grant exemption on the medical equipments for a period of three months. Previously, the FBR granted exemption on various medical equipments through SRO 237(I)/2020 dated March 20, 2020.
Following goods are exempted from whole of sales tax at import stage:
01. Real-time PCR system (standard 96-well plate and
0.2ml tubes format, 5 channel)
02. Biosafety Cabinet
03. Auto Clave 50 Liter Capacity
04. Multi channel pipette (0.5-10 pi)
05. Single channel pipette a) 2 pi b) 10 pi c) 200 pi d) 1000 pi
06. Muti channel pipette 20-200 ml
07. Vacuum fold
08. Micro Centrifuge (Non-refrigerated, Rotor capacity: 12 x 1.5 / 2.0 ml vessels, 2 x PCR strip, Max. speed: 12,100 x g (13,400 rpm))
09. PCR Cabinet (FIEPA filter system, UV and white light)
10. Real-time PCR kit for the detection of Coronavifus (SARS-CoV2)
11. Viral RNA Extraction Kit and machine (Automatic Extractors)
12. VTM (Viral Transport Medium)
13. Dr Oligo Synthesizer
14. Refrigerator/freezer (-20 °C)
15. Vortex Machine
16. Refrigerated Centrifuge Machine (Rotor capacity 1.5ml x 24 max. speed 14000 rpm)
17. UPS (6 KVA)
18. Tyvek Suits
19. N-95
20. Biohazard Bags (18 Liters)
21. PARR (Powdered Air Purifying respirators)
22. Multimode ventilator with air compressor
23. Vital sign monitor with 2IBPand ETco2 two Temp.
24. ICU motorized patient bed with side cabinet and over bed table
25. Syringe infusion pump
26. Infusion pump
27. Electric suction machine
28. Defibrillator
29. X-Ray Mobile Machine
30. Simple Nebulizer
31. Ultrasound machine
32. Noninvasive BIPAP
33. ECG Machine
34. Pulse Oximeters
35. Ripple mattress
36. Blood gas analyzer
37. AMBU Bag
38. Nitrile Gloves
39. Latex Gloves
40. Goggles
41. Face Shields
42. Gum Boots
43. Mackintosh bed sheets
44. Surgical Masks
45. Air Ways
46. Diaflow
47. Disposible Nebulizer Mask Kit
48. EGG Electrodes
49. ETT Tube (Endotracheal Tubes) All sizes
50. Humidifier Disposable Flexible
51. IV Cannula all sizes
52. IV Chambers
53. Oxygen Recovery Kit
54. Padded Sheets
55. Stomach Tube
56. Stylet for Endotracheal Tube
57. Suction Tube control valve
58. Tracheostomy Tube 7, 7.5, 8
59. Ventilator Circuit
60. Ventury Masks
61. Disposable shoes cover (water proof)
This notification shall take effect from the June 20, 2020 and shall remain effective for a period of three months.
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No date extension for sales tax payment, return filing: FBR
The Federal Board of Revenue (FBR) issued a clear and unequivocal statement on Friday, dispelling any rumors of an extension in the filing of sales tax and federal excise returns.
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