The Federal Board of Revenue (FBR) has announced updates to the rate of income tax applicable to payments made abroad through credit or debit cards during the tax year 2021 (July 01, 2020, to June 30, 2021).
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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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Jazz pays Rs5 billion income tax liability on court order
ISLAMABAD: Pakistan Mobile Communication Limited (PMCL) – the operator of Mobilink / Jazz on Thursday paid an amount of Rs5 billion out of total Rs22 billion as tax demand created by Large Taxpayers Office (LTO) Islamabad.
The payment has been made as per the directions of Islamabad High Court (IHC) order in Income Tax reference No. 32/2020 dated November 10, 2020.
Earlier, the IHC allowed PMCL to deposit an amount of Rs5 billion against income tax liability.
A division bench of the IHC in a hearing on November 10, 2020 granted the application of the petitioner i.e. PMCL to deposit Rs5 billion. The high court also granted interim relief to the petitioner and suspended notices sent to the applicant under Section 140 of the Income Tax Ordinance, till the next date of hearing i.e. December 02, 2020.
During the proceedings the counsel for the petitioner submitted that the petitioner was willing and ready to pay a sum of Rs5 billion.
The counsel for the Federal Board of Revenue (FBR) submitted that the sum offered to be deposited by the petitioner was meager as compared to the total liability. The counsel submitted that the applicant is liable to pay a sum of Rs22 billion plus penalty etc.
The LTO Islamabad last month initiated tax recovery of Rs25 billion from M/s. PMCL by sealing of its business premises.
The LTO Islamabad took the action against the mobile operator as income tax amount Rs25.39 billion was outstanding against the defaulter.
“The defaulter is refraining itself deliberately, dishonestly and without lawful excuse to discharge tax liability and thus causing huge loss to the national exchequer,” according to a notice of LTO Islamabad.
While responding to the report, the PMCL issued the following statement:
“Jazz is a law-abiding and responsible corporate citizen. Our contribution to Pakistan’s economy over the past 25 years is significant.
“We have received a notice from FBR this afternoon. Jazz has made tax submissions based on legal interpretations of the tax owed. We will review and take measures under our legal obligations and will collaborate with all concerned institutions for an early resolution of this issue.”
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FBR issues TORs for probing complaints against IR, Customs officials
ISLAMABAD: Federal Board of Revenue (FBR) on Thursday issued Terms of Reference (TORs) for processing of complaints and launch probe against officials of Inland Revenue and Pakistan Customs.
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Capital Gain Tax: investors require maintaining accounts, records separately
ISLAMABAD: Federal Board of Revenue (FBR) has said that every investor of stock exchange shall maintain accounts and records separately for each of his brokerage accounts regarding payment of capital gain tax (CGT).
The FBR officials on Thursday said that the record shall be maintained in a way which sufficiently enable for verification of discharge of his obligations under these rules.
Every investor shall maintain in particular the following accounts and records, namely:-
(a) fortnightly ledger statements of the investor’s brokerage account or each brokerage account if there are more than one account whether in the investor’s own name or any benami accounts, generated by his broker;
(b) fortnightly CDC statements of the investor’s CDC sub account or each CDC sub account corresponding to each brokerage account, if there are more than one brokerage account whether held in the investor’s own name or any benami accounts;
(c) record of security holdings and their value carried in the investor’s brokerage account on 30th June of each year;
(d) record of cash carried in the investor’s brokerage account as on 30th June of each year;
(e) record of funds deposited in the investor’s brokerage account; and
(f) record of funds withdrawn from the investors brokerage account.
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FBR connects with NADRA system to identify potential taxpayers
ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday signed a Memorandum of Understanding (MoU) with National Database Regulatory Authority (NADRA) to verify persons’ identity directly.
A statement issued by the FBR said that on the directives of the Prime Minister to facilitate taxpayers the MoU had been signed to directly verify CNIC and other relevant documents.
A FBR spokesman said that the connectivity would facilitate taxpayers as this would automatically feed tax refund data into withholding statements and tax returns.
Further, it will reduce timing to comply with relevant laws, the spokesman added.
The FBR hoped that this connectivity would also help the tax authorities to connect with other organizations.
The connectivity with NADRA will help the FBR to identify such individuals who are out of tax net and concealing their incomes and assets, the spokesman said.
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FBR sets up body to regulate jewelers, real estate agents
ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday approved a body to regulate transactions by jewelers, real estate agents and accountants under anti-money laundering (AML)/Counter Financing of Terrorism (CFT) laws.
According to an office order, the FBR approved the operationalization of Directorate General of Designated Non-Financial Business and Professions (DNFBPs), with its headquarter at Islamabad within the existing sanctioned strength and budget grant of FBR with immediate effect.
The Designated Non-Financial Businesses and Professions (DNFBPs) are real estate agents, jewelers and accountants.
The FBR issued SRO 924(I)/2020 dated September 30, 2020 related to DNFBPs to comply with conditions under Finance Action Task Force (FAFT).
Under the latest office order, the FBR sets up field formations at Islamabad, Quetta, Gilgit-Baltistan, Lahore and Karachi.
The FBR has assigned additional responsibilities to customs and Inland Revenue officials to operate the Directorate General of DNFBPs.
Dr. Bashirullah Khan (IRS/BS-20) has been assigned additional responsibility of Director General, Directorate General of DNFBPs.
Other officials who have been given additional charge as Director of Directorate General of DNFBPs are included: Asem Iftekhar, (IRS/BS-20) Karachi, Zafar Iqbal Khan (IRS/BS-20) Islamabad, Irfan Javed (PCS/BS-20), Quetta, Rashid Habib Khan (PCS/BS-20) Gilgit Baltistan, Ahmad Kamal (IRS/BS-20) Lahore and Muhammad Tahir (PCS/BS-19) Director (HQ) DNFBPs Islamabad.
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FBR issues SRO to regulate accountants, jewelers, real estate agents under AML/CFT
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FBR decides punitive action against non-filer companies, individuals
ISLAMABAD: Federal Board of Revenue (FBR) has decided to take punitive measures against corporate entities for not filing income tax returns.
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FBR bars creation of new units to resolve HR shortage
ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday restrained tax offices from creating new units/ranges for resolving shortage of human resource.
A circular issued by the FBR stated that a meeting of Inland revenue-Operations and Admin Wings of FBR was held on November 04, 2020 in which various requirements of IR field formations were discussed.
It was observed that field formations had increased the number of units and ranges without taking into consideration the notified sanctioned strength of the field offices.
“Needless to say, with increase of just one extra unit, there raises a requirement of support and technical staff, this leads to an unending shortage of human resource for the organization,” it added.
The FBR directed the tax offices to avoid creating new unit/range unless prior approval of the board is obtained.
The FBR also directed all the chief commissioners to share details of existing units and ranges to enable the tax authorities to notify the sanctioned strength.
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KTBA expresses concerns over delay in form issuance for taxpayer profile update
KARACHI: Tax practitioners on Tuesday expressed serious concern over delay by Federal Board of Revenue (FBR) in issuing forms for mandatory profile update by taxpayers.
Karachi Tax Bar Association (KTBA) in a letter sent to Member Inland Revenue Operations discussed the delay by the FBR in issuing forms for mandatory profile update by taxpayers.
The KTBA said that Section 114A of the Income Tax Ordinance, 2001 was introduced through Finance Act, 2020.
The profile update has been made mandatory for taxpayers to electronically update certain information including bank accounts, utility connections, details of business premises etc.
The deadline for electronically filing the taxpayers profile form in case of persons already registered before September 30, 2020 is on or before December 31, 2020. In case of a person registered after September 30, 2020 the registration must be within 90 days of the registration.
Further, failure to file the form would not only entail punitive penalty but the taxpayers would also be excluded from the Active Taxpayers List (ATL).
Till today the form as required to be filed under Section 114A has not been prescribed let alone its availability on IRIS.
The KTBA pointed out the gravity of the situation, as updating the profiles of almost 2.5 million taxpayers and that too with the comprehensive information is a stupendous and time consuming exercise for the counsels of the taxpayers and that too at the time when the counsels of the taxpayers are engrossed in filing the tax returns as well as wealth statements, the last date of which is falling due on December 08, 2020.
It is a must exercise to be undertaken like in any developed tax regime in the world, yet the non-availability of prescribed forms and the facility of the same on IRIS is highly unexpected and rather damaging. “The is coupled with the fact that with limited functionality on IRIS in these times of return filing, it is feared that IRIS may malfunction disrupting the timelines to be adhered for filing the income tax return and updation of taxpayer’s profile together.”
The KTBA urged Member IR Operations to immediately take measures to prescribed the form as required under Section 114A of the Ordinance and also give directions to provide the same in IRIS for updation of taxpayer’s profile with the directions to field offices not to issue penalty notices as the delay is not on part of the taxpayers.
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Rate of advance income tax on education fee
ISLAMABAD: Federal Board of Revenue (FBR) has updated rate of advance income tax to be collected by educational at the time of preparing fee challan during tax year 2021 (July 01, 2020 to June 30, 2021).
The FBR issued Income Tax Ordinance, 2001 (updated up to June 30, 2020) after incorporating amendments brought through Finance Act, 2020.
The FBR updated the rate of collection of tax under section 236I of Income Tax Ordinance, 2001, which shall be 5 percent of the amount of fee.
Following is the text of Section 236I under which the advance tax to be collected by educational institutions:
236I. Collection of advance tax by educational institutions.— (1) There shall be collected advance tax from a person not appearing on the active taxpayers’ list at the rate specified in Division XVI of Part-IV of the First Schedule on the amount of fee paid to an educational institution.
(2) The person preparing fee voucher or challan shall charge advance tax under sub-section (1) in the manner the fee is charged.
(3) Advance tax under this section shall not be collected from a person on an amount which is paid by way of scholarship or where annual fee does not exceed two hundred thousand rupees.
(4) The term “fee” includes, tuition fee and all charges received by the educational institution, by whatever name called, excluding the amount which is refundable.
(5) Tax collected under this section shall be adjustable against the tax liability of either of the parents or guardian making payment of the fee.
(6) Advance tax under this section shall not be collected from a person who is a non-resident and,—
(i) furnishes copy of passport as an evidence to the educational institution that during previous tax year, his stay in Pakistan was less than one hundred eighty-three days;
(ii) furnishes a certificate that he has no Pakistan-source income; and
(iii) the fee is remitted directly from abroad through normal banking channels to the bank account of the educational institution.