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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.

  • FBR records 31 percent decline in May collection

    FBR records 31 percent decline in May collection

    ISLAMABAD: Federal Board of Revenue (FBR) has recorded 31 percent decline in revenue collection during May 2020 owing to halt in economic activities after lockdown imposition.

    According to provisional figures released by the FBR on Sunday, the tax authorities collected Rs227 billion in May 2020 as compared with Rs330.1 billion collected in the same month of the last fiscal year.

    The massive fall in revenue collection has been attributed to halt in business activities due to lockdown which was imposed to stop spread the coronavirus.

    FBR spokesman in a statement said that despite lockdown in the country the revenue body collected Rs3,518 billion during July – May 2019/2020 as compared with Rs3,266 billion in the corresponding period of the last fiscal year.

    The revenue collection for the current fiscal year has been reduced to Rs3,908 billion from actual target of Rs5,500 billion initially set for the current fiscal year.

    The spokesman said that the FBR so far collected around 90 percent of the assigned target of Rs3,908 billion.

  • FBR discontinues manual payment of income tax refunds

    FBR discontinues manual payment of income tax refunds

    ISLAMABAD: Federal Board of Revenue (FBR) has discontinued manual issuance of income tax refunds with immediate effect to ensure transparency.

    The release of income tax refunds will be carried out electronically, said an office order of the FBR dated May 29, 2020.

    The FBR is going to disburse income tax refunds directly to bank accounts of claimants. In this regard, the finance ministry released an amount of Rs10 billion for payment of income tax refunds, official sources said on Saturday.

    The finance ministry initially provided the fund of Rs10 billion to the FBR for sanctioning of income tax refunds to taxpayers.

    The FBR decided to liquidate amount of Rs5 million claims out of the fund. Pending income tax refunds already prepared and kept in draft mode in Iris by the relevant officers where the amount of Rs5 million (cumulatively) has to be liquidated at this stage.

    The FBR further explained that cumulatively means the total amount of refund in respect of a taxpayer (for the tax year 2014 to 2019) duly processed and sanctioned under the law.

    The FBR further directed the chief commissioners that bank-wise (with IBAN numbers) taxpayers-wise lists of cases ripe for the sanctioning of income tax refunds up to Rs5 million should be dispatched by May 31, 2020.

    The FBR said that since the entire process of refund issuance under Prime Minister’s COVID-19 Package had to be carried out electronically, by disbursal of refunds through the AGPR, therefore, no manual issuance of income tax refunds is allowed till further orders.

  • FBR recommended CNIC condition on sale of above 10 tola gold

    FBR recommended CNIC condition on sale of above 10 tola gold

    KARACHI: Federal Board of Revenue (FBR) has been urged to fix the condition of Computerized National Identity Card (CNIC) on purchase of around 10 Tola or above of gold.

    Karachi Chamber of Commerce and Industry (KCCI) in proposals for budget 2020/2021 submitted to FBR, said that during last two years, prices of gold has sharply increased and the amount of Rs.50,000 is quite irrational and unfair due to high value of precious metal.

    Only 7 grams gold jeweler will cost more than Rs.50,000, the KCCI said.

    Highlighting the impact, the KCCI said that the customers will deal directly with unorganized sector / workshops

    – Mostly undocumented jewelers benefit from requirement of CNIC for purchases above Rs.50000/-

    – Will encourage under reporting of transactions

    – Will result in loss of taxes to government

    The chamber therefore proposed that the issue may been seen realistically and condition of NIC be imposed on purchase of 10 tolas or more.

    It will boost official business activities and will also generate and promote economic activities besides generating revenue for the government as well.

  • FBR advised to withdraw powers of freezing bank accounts for tax recovery

    FBR advised to withdraw powers of freezing bank accounts for tax recovery

    KARACHI: Federal Board of Revenue (FBR) has been advised to withdraw powers of tax officials related to freezing bank accounts for tax recovery.

    Karachi Chamber of Commerce and Industry (KCCI) in its budget proposals for 2020/2021 submitted to the FBR highlighted provisions of Income Tax Ordinance, 2001 regarding accessing bank accounts for tax recovery.

    Under Section 140 of the Income Tax Ordinance, 2001 which deals with recovery of tax from persons holding money on behalf of a taxpayer.

    — (1) For the purpose of recovering any tax due by a taxpayer, the Commissioner may, by notice, in writing, require any person –

    (a) owing or who may owe money to the taxpayer; or

    (b) holding or who may hold money for, or on account of the taxpayer.

    This provision and further access to information on a bank accounts under other provisions of law, have been counterproductive and led to a flourishing cash economy, the KCCI said.

    It said that there were many innovative ways been evolved by businesses similar to the blockchain and local hundi system.

    Such provisions only affect the registered businesses while the entire unregistered sector is immune from such laws and a coercive approach.

    Banks are also suffering with decline in deposits and transactions which used to be conducted through the system. It is evident from a slowdown in economic activities, the chamber said.

    It is better to do way with such anti-growth and anti-business policies and laws. Powers to access the bank accounts of registered persons and to freeze account should be withdrawn through Finance Bill 2020.

    Access may only be limited to accounts of unregistered persons, but account may not be blocked or frozen.

    Commissioner should only be authorized to obtain information about the funds in accounts and should be authorized to seek clarification as to the nature of transactions and sources of funds. Such persons may be brought into the tax-net.

    The Karachi Chamber said that the proposed amendments would provide relief to the registered persons and restore confidence in banking system and would encourage official transactions.

    Besides, it would help in bringing unregistered persons into the tax-regime.

    Stimulate economic activities and growth. Increase bank deposits which may be used for lending to industry.

  • FBR suggested to abolish further sales tax on fulfilling CNIC condition

    FBR suggested to abolish further sales tax on fulfilling CNIC condition

    KARACHI: Federal Board of Revenue (FBR) has been proposed to abolish further sales tax in case taxpayers fulfil condition of Computerized National Identity Card (CNIC).

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  • Mandatory training courses for promotions to be completed through tele-teaching

    Mandatory training courses for promotions to be completed through tele-teaching

    ISLAMABAD: The mandatory training courses for promotion of government officers including from Federal Board of Revenue (FBR) will be held online considering COVID-19 pandemic, a notification said.

    In this regard National School of Public Policy (NSPP) informed that all the courses of NSPP i.e. 112th National Management Course (NMC), 27th Senior Management Courses (SMC) and 29th Mid-Career Management Course (NCMC) have been redesigned keeping in view the prevailing health emergency on account of of COVID-19.

    “Remaining training activities will be completed through remote tele-teaching mode by using Zoom/Skype and e-portal of respective courses,” it said.

    “These essentially comprise of Simulation Exercise, Case Studies, Analysis Papers, Topical Discussions and Research Papers particularly related to the foreign study tour of the respective country assigned to different participants of NMC.”

    The notification said that the courses had been rescheduled by reducing the duration of three weeks of NMC, five weeks of SMC and three weeks of MCMC respectively subject to the slight modifications by the respective NIMs made keeping in view the activities completed before the suspension of the courses.

    The participants have been asked to join the 112th NMC, 27th SMC and 29th MCMC respectively with effect from June 01, 2020 through e-portal of the respective unit.

  • Massive increase in penalty amount on the cards for violating tax laws

    Massive increase in penalty amount on the cards for violating tax laws

    Tax authorities are considering a significant increase in monetary penalties for violations of general provisions of income tax laws. According to sources within the Federal Board of Revenue (FBR), the Large Taxpayers Unit (LTU) Karachi has submitted proposals for the budget 2020/2021, suggesting an increase in fines and penalties from the current Rs5,000 to Rs50,000.

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  • Changes to CNIC condition likely in budget

    Changes to CNIC condition likely in budget

    ISLAMABAD: Federal Board of Revenue (FBR) may introduce changes to mandatory CNIC (Computerized National Identity Card) condition in the upcoming budget 2020/2021 in to facilitate registered taxpayers.

    At present unregistered purchasers, excluding end-consumers, of above Rs50,000 are required to provide a copy of CNIC in order bring the sales into the documented economy.

    The business community raised concern over the low purchase limit. The sources said that the FBR is considering to enhance the limit to Rs200,000.

    In the last budget the government made it mandatory for registered persons to obtain CNIC of unregistered person at the time of sale above Rs50,000.

    The amendment was brought to Section 8 and Section 23 of Sales Tax Act, 1990 under which in case of invoices issued without CNIC or National Tax Number (NTN) of buyer, related input tax was disallowed on prorate basis except in cases where supplies are made to end consumers not exceeding Rs. 50,000.

    Condition of providing CNIC number of buyers on invoices, to claim input tax adjustment, have benefitted unorganized sector more than the already documented sector.

    Due to the condition, buyers prefer to purchase from unregistered suppliers as they do not ask for CNIC numbers. On the other hand, registered persons and corporate entities, who were already facing resistance from buyers for charging sales tax and further tax, have been facing severe deterrence from buyers who are resisting provision of CNIC numbers.

    Consequently, the compliant taxpayers are forced to either provide CNICs of their employees, relatives, truck drivers, etc. or to shut down their businesses as they are at a competitive disadvantage with the unorganized sector.

    This condition has also encouraged cash economy as taxpayers have been withdrawing their money from banks and are dealing in cash only.

    According to a report despite massive changes in sales tax laws in Finance Act 2019 to force and mandate sales tax registration and filing of sales tax returns, there is only about 7 percent annual increase in sales tax returns filed from 146,922 return filers in June 2019 to 158,206 in December 2019.

    Out of 11,284 additional returns, only 2,769.are payment returns while rest is Nil and Null returns.

    The condition of CNIC on unregistered sales has been introduced in the Finance Act 2019 but it was not implemented in July 2019. While, from August 2019 to January 2020, the condition was relaxed through agreement between shopkeepers and FBR.

    The FBR sources said that business community had also recommended changes in provisions related to CNIC conditions.

    Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in its proposals for budget 2020/2021 suggested to enhance the purchase limit to Rs100,000.

    It also pointed out that CNIC condition has been causing cashflow issues since its implementation which will further intensify during the current pandemic of CoVid-19, especially for registered taxpayers.

    Therefore, the FPCCI sought a general amnesty through legislation in the next budget regarding CNIC condition for the whole tax year 2020 starting from August 2019 to June 2020.

  • Tax credit for final, minimum regimes may be withdrawn

    Tax credit for final, minimum regimes may be withdrawn

    ISLAMABAD: The tax authorities may withdraw tax credit available to taxpayers falling in final and minimum tax regimes, sources in Federal Board of Revenue (FBR) said.

    The sources said that the Large Taxpayers Unit (LTU) Karachi has submitted its proposals for budget 2020/2021 and recommended withdrawal of tax credit for final tax and minimum tax regimes.

    The sources said that the elimination of tax credit likely to generate Rs5 billion during the next fiscal year.

    The LTU Karachi suggested amendment in Section 65B, 65D and 65E of Income Tax Ordinance, 2001 to withdraw tax credit for taxpayers falling in minimum tax and final taxation.

    The LTU Karachi said that allowing tax credits against minimum tax and final taxes payable under the Ordinance is against the principal of fairness and final tax regime.

    It further said that the withdrawal of tax credit to such taxpayers would help the revenue body to get additional Rs5 billion during the next fiscal year.

  • FBR extends date for POS integration up to June 30

    FBR extends date for POS integration up to June 30

    ISLAMABAD: Federal Board of Revenue (FBR) on Thursday extended the date for integration of Point of Sale (POS) by high volume retailers up to June 30, 2020.

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

    The FBR said that only those retailers can integrate their POS by June 30 who submit their intention to RTOs/LTUs by June 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.

    They said that big outlets and shopping plazas are observing closure during the lockdown and many of those big retailers would not able to make compliance.

    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.

    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.