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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 should shun multiple tax audits

    FBR should shun multiple tax audits

    KARACHI: Business community has advised Federal Board of Revenue (FBR) to shun conducting multiple audits of a taxpayer in a year in order to ensure ease of doing business.

    In its proposals for budget 2020/2021 submitted to the FBR, the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said that registered Tax payers receive notices of multiple audits in a year such as Income Tax audit under Section 177 of the Income Tax Ordinance 2001, Withholding Tax audit under Section 161 of the Income Tax Ordinance 2001; Sales Tax audit under Section 25 of the Sales Tax Act 1990.

    Moreover, the taxpayers also receive multiple notices of amendments in assessments under Section 122 of the Income Tax Ordinance 2001 and under Section 111 of the Income Tax Ordinance 2001 to explain sources.

    The multiplicity of audit of a single taxpayer in a single year is against the concept of ease of doing business and creating unnecessary problems for tax payers.

    The FPCCI recommended that multiplicity of audits in a single year be done away with and replaced with the concept of composite audit of registered taxpayers.

    Further, it is suggested that new audit parameters should be enforced after consultation with all stakeholders.

  • FBR officials fail to submit asset declarations; names made public

    FBR officials fail to submit asset declarations; names made public

    ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday released the names of officers in Inland Revenue Service (IRS) and Pakistan Customs Service (PCS) who failed to submit their declarations of assets.

    The FBR issued the names BS-18 officers of Inland Revenue Service (IRS) and Pakistan Customs Service (PCS) who are in promotion zone.

    BS-18 officers of Inland Revenue Service (IRS)

    1. Muhammad Tahir Khan, Additional Commissioner IR, RTO, Sialkot (OPS)
    2. Muhammad Asfandyar Janjua, Additional Commissioner IR, RTO-II, Karachi.
    3. Ms. Sadia Ali Akram, Additional Commissioner IR, CRTO, Karachi.
    4. Muhammad Ali Khan, Secretary, FBR.
    5. Ms. Amara Sarwar, Additional Commissioner IR, CRTO, Lahore.
    6. Ms. Neelam Ifzal, on deputation to PRA, Lahore.
    7. Inayat Malik, Additional Commissioner IR, LTU, Islamabad
    8. Laiq Zaman, Additional Commissioner IR, LTU-II, Karachi
    9. Naseebullah, on deputation to BRA, Quetta
    10. Naseer Ahmad, Additional Commissioner IR, CRTO, Karachi
    11. Muhamamd Masood Ahmad Gorsi, Additional Commissioner IR, CRTO, Karachi
    12. Ms. Sadia Iftekhar, Secretary, FBR, Islamabad
    13. Tarique Aziz, Deputy Commissioner IR, CRTO, Karachi.
    14. Nasir Khan, Deputy Commissioner IR, RTO-II, Karachi.

    BS-18 officers of Pakistan Customs Service (PCS)

    1. Jamshed Ali Talpur, Secretary, FBR
    2. Dr. Imran Rasool Khan, Deputy Collector, MCC Hyderabad
    3. Rana Irfan Shaukat, Deputy Director, Directorate of Intelligence and Investigation- FBR, Multan
    4. Saad Ata Rabbani, Deputy Director, Directorate of Intelligence and Investigation, FBR, Karachi.
    5. Wajid Zaman, Deputy Director, Directorate General of Intelligence and Investigation, FBR, Isalmabad.
    6. Ihsanullah Shah, Deputy Collector, MCC Gwadar
    7. Ms. Ammara Durrani, Deputy Collector, MCC (JIAP), Karachi.
  • FBR suggested to abolish tax refund culture

    FBR suggested to abolish tax refund culture

    KARACHI: Federal Board of Revenue (FBR) has been suggested to abolish tax refund culture and bring down sales tax at five percent.

    Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in its proposals for budget 2020/2021 suggested that the culture of refunds should be abolished and government should collect GST at the rate of 5 percent.

    “It will transfer the benefits to the end consumers which lead the control over inflation and poverty and enhancement in economic activities,” the FPCCI said.

    The apex trade body said that the reduction in the rate of sales tax will enlarge the size of consumer markets and government earnings will definitely increase.

    It will transfer the benefits to the end consumers which lead the control over inflation and poverty and enhancement in economic activities.

    The FPCCI highlighted the present structure of taxation policies in Pakistan.

    Here, it is noteworthy that inducement of private investment particularly foreign direct investment is the only feasible option to develop the badly deteriorated infrastructure in Pakistan.

    Greenfield investment and capitalization of the savings of expatriate Pakistanis are also included in this program.

    FPCCI proposed fiscal policy, while revival strategy will be based on foreign investment. It is unfortunate that tax rates in Pakistan are considered as major hurdle in investment.

    Tax and contribution as percentage of Gross profit is 33.9 percent in Pakistan, while it is 49.7 percent in India, 38.7 percent in Malaysia, 36.6 percent in USA, and 33.4 percent in Bangladesh.

    The average tax rate on corporate sector in Pakistan is 29 percent; it is 25 percent in India, 24 percent in Malaysia, and 21 percent in USA.

    It is important to note that tax system in Pakistan emphasizes on indirect taxes and surcharges. The share of direct taxes in government revenue is around 37 percent in Pakistan, 47 percent in India, 46 percent in Malaysia, 38 percent in UK and 50 percent only in USA.

    The lower share of direct taxes is because of exemptions and less e orts for tax collections from agriculture, services, real estates and retail trading activities.

    This situation leads to dependency on indirect taxes. The indirect taxes hampered the industry in many ways: they increase the cost of production and reduce the demand for manufacturing products, because of higher market prices of those products by inclusion of sales tax. By such a manner, they damage the industrial competitiveness and induce the inflation in economy.

    The FPCCI has recommended the shifting of dependency from indirect to direct taxes. We strongly recommend the reduction rate of sales tax to provide relief to the general public.

    This step will improve the buying power of general public and will help the industry in revival process and accelerate the investment in the country.

    It is extremely important for the survival of Pakistan economy at this stage. The reduction in the rate of GST is proposed on the basis of expected enhancement in revenue because of enhanced economic activities.

    To increase its revenue government should not depend on indirect taxation. This approach leads the poverty and inflation. We should encourage revenue enhancement through direct taxation on equity and egalitarian basis.

    Tax should be paid according to the magnitude of earning regardless the source of earning.

    To accelerate economic activities and improving efficiencies, the FPCCI suggests reduction in the rate of GST.

    This is the pivotal point of our taxation policy. A solution of containing the ongoing unsettled business environment is imperative. The present ongoing conflicts and contradictions has reduced the sales and as well as have chocked the sales points and agents of sales. The re-initiation efforts of FPCCI towards saleable policy objective of fixed sales system may find a substitute of settlement of ongoing disputed business environment.

    The reduction in the rate of sales tax will enlarge the size of consumer markets and government earnings will definitely increase. The sources of FBR have been indicating the effective tax rate of GST is less than 5 percent, which indicate that 71 percent of total collection of sales tax has to pay back in account of input adjustment and refund claims.

    The FPCCI in 2014 took-up a subject of fixed sales tax regime, which attended the influence level and even the then Finance Minister conceded to consider the same during his tenor as the document, submitted by FPCCI, concluded towards the objective that the collection would increase and not decrease by promoting business conducting environment through fixed sales tax regime.

    This will provide demand supported production environment for manufacturing. It will improve the collections and settle the disputed business environment.

  • FBR suggested to issue exempt list of persons not required to pay withholding tax

    FBR suggested to issue exempt list of persons not required to pay withholding tax

    KARACHI: Federal Board of Revenue (FBR) has been urged to issue a separate list of exempt list of persons who do not require to pay withholding tax as mentioned in Section 100BA and Tenth Schedule of Income Tax Ordinance, 2001.

    (more…)
  • Independent appellate recommended to boost taxpayers’ confidence

    Independent appellate recommended to boost taxpayers’ confidence

    KARACHI: Business community has recommended to establish an independent tax appellate system in the country to boost taxpayers’ confidence and discourage irrational assessments.

    Overseas Investors Chamber of Commerce and Industry (OICCI) in its budget proposals for fiscal year 2020/2021 recommended to establish the independent tax appellate system to boost taxpayer’s confidence and discourage irrational assessments by the tax authority driven by revenue collection targets.

    Due to immense delays in conclusion of disputes by the appellate authorities and fear of financial exposure arising from recovery proceedings by FBR, taxpayers have to resort to the High court to cover their financial exposure.

    The first appellate authority Commissioner Appeals come under the direct administrative control of FBR whereas the second appellate authority Appellate Tribunal Inland Revenue comes under the administrative control of the Ministry of Law.

    There is a need of major reforms in the tax appellate process to expedite resolution and ensure fairness in the process.

    The OICCI recommended:

    i. Tax appellate forums should come under the direct supervision of High courts and should be independent of FBR.

    ii. Professional Tax adjudicators should be appointed in the process with clear tasks of rapid disposal of cases.

    iii. Recovery proceedings should not be initiated until tax assessments have passed at least one independent forum.

    iv. Decision should be made within 60 days of the filing of the response.

  • FBR directs officers to submit asset declarations

    FBR directs officers to submit asset declarations

    ISLAMABAD: Federal Board of Revenue (FBR) has directed officers of BS-18, who are in promotion zone, to submit their assets declarations of past five years.

    The FBR in an official memorandum issued on Friday directed all BS-18 officers of Inland Revenue Service (IRS), Pakistan Customs Service (PCS) and ex-cadre, who are in promotion zone, to forward their declaration of assets for the last five years up to June 30, 2019 by May 15, 2020.

    FBR sources said that as per promotion rules the officials had been required to submit their asset declaration besides providing performance evaluation reports (PERs).

    The sources said that a large number of officers had not submitted their assets declarations.

    They said that in case the officials failed to submit the asset declaration the FBR would initiate departmental proceedings.

  • FBR chief rules out reducing sales tax rate to single digit

    FBR chief rules out reducing sales tax rate to single digit

    KARACHI: Nausheen Javaid Amjad, Chairperson of Federal Board of Revenue (FBR) has ruled out reducing sales tax rate to single digit and said such move would bankrupt the economy of the country.

    However, she hinted at reducing the further sales tax rate in the upcoming budget 2020/2021.

    A press release issued by Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Friday quoted FBR chairperson as saying. She made these comments while a meeting with the office bearers of the apex trade body.

    The chairperson said that refunds are fully automated under FASTER; amendment in Annexures-F and H should be identified by the exporters for FBR consideration; tax on machinery would be abolished.

    The FBR chairperson further highlighted proposals to be incorporated in the Finance Bill 2020 which included that tax on distributors would be uniformed; tax rates including minimum tax rates would be reviewed for reduction; withholding tax paid would be appeared on IRIS w.e.f June, 2020; Exemption Certificate Law would be amended and rationalized; option would be given to remain in presumptive tax regime or opt for normal tax regime ; greenfield industry issue would be resolved in consultation with Engineering Development Board (EDB).Regarding CNIC condition the Chairperson, FBR said that agreement has been made with the traders and cannot be reversed.

    In response to the customs issues raised by the FPCCI, she replied regulatory duty on tyre would be considered to abolish in the next budget.

    She proposed to hold second round of the meeting to discuss the FPCCI Proposals in detail for consideration and incorporation in the forthcoming Federal Budget 2020-21.

  • FBR exempts various properties from attachment for tax recovery

    FBR exempts various properties from attachment for tax recovery

    ISLAMABAD: Federal Board of Revenue (FBR) has exempted various properties from attachment for recovery from tax defaulters.

    The FBR issued SRO 353(I)/2020 through which the tax officials have been restrained from attaching certain movable properties of a defaulter for recovery of due taxes.

    According to the notification, the FBR officials may not attach assets for recovery, which included the necessary wearing apparel, cooking vessels, beds and bedding of the defaulters, his wife and children, and such personal ornaments, as, in accordance with religious usage, cannot be parted with by any women.

    The tax official further barred from attaching assets for recovery, which included tools of artisans, and where the defaulter is an agriculturist, his implements of husbandry and such cattle and seed grain as may be necessary to enable him to earn his livelihood.

    The FBR also explained the assets, which cannot be attached by the tax officials for recovery. This will include houses and other buildings (with the materials and the sites and the land immediately appurtenant) belonging to an agriculturist and occupied him.

    The FBR said that the tax officials may also not attach included: books of account; a mere right to sue for damages; and any right of personal service.

    The amendment to sales tax rules also prohibited the tax officials to attach all compulsory deposits and other sums in or derived from fund to which the Provident Fund Act, 1925, for the time being applies in so far as they are declared by the Act not to be liable to attachment.

  • FBR orders food outlets to display tax amount

    FBR orders food outlets to display tax amount

    ISLAMABAD: Federal Board of Revenue (FBR) has made it mandatory for food outlets to display tax amount along with retail price in menus.

    The FBR on Wednesday issued SRO 353(I)/2020 to make it mandatory for all the restaurants, bakeries, caterers and sweetmeat shops supplying prepared foods, foodstuff and sweetmeat to show prices and amount of tax separately on menu cards for menu board displayed in their outlets for the end consumers.

    The FBR has made this requirement for tier-I retailers, who are required to integrate their point of sales with the FBR’s online system.

    The FBR also made amendment through notification and made it mandatory for all the retailers to show prices and amount of tax separately on the price tags attached with finished fabric and locally manufactured finished articles of textile and textile made-ups leathers and artificial leather.

    The FBR made these changes in order to ensure revenue generation from the retail sector. The FBR recently allowed input tax adjustment to Tier-1 retailers in order to attract more retailers into this segment.

  • FBR allows duty drawback on supplementary food items

    FBR allows duty drawback on supplementary food items

    ISLAMABAD: Federal Board of Revenue (FBR) has allowed duty drawback on import of ready to use supplementary food, which included palm oil and skimmed milk.

    The FBR on Tuesday issued SRO 341(I)/2020 to allow 5.33 percent freight on board (fob) to the extent of customs duty. The duty drawback is available from April 27, 2020.

    The facility has been allowed to items falling under HS Code 2106.9090, which included:

    01. RBD Palm Olien

    02. RBD Canola Oil

    03. Skimmed Milk Powder

    04. Emulsifier

    05. Vitamin and Mineral Premix

    06. Anti Oxidant

    07. Whey Powder

    08. Peanuts