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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 organizes event to aware people about POS

    FBR organizes event to aware people about POS

    LAHORE: Federal Board of Revenue (FBR) has organized an event at Packages Mall, Lahore to create awareness among people about the Point of Sale (Linked Invoicing System) of FBR, a statement said on Saturday.

    The objective of this event was to apprise the people and the retailers about the installation and utility of Point of Sales (POS) machines at big retail outlets.

    Designated officers of FBR HQ led by Chief, Facilitation & Taxpayers Education Tehmina Aamer and included Secretary FATE Alam Zaib Khan and Secretary PR Adnan Akram Bajwa participated in the program.

    Lot of people showed keen interest in the activities of the program and appreciated the steps taken by FBR on Point of Sales (Linked Invoicing System).

    The people were informed as to how they could verify about their paid taxes through Tax Aasaan application. The retailers were convinced to get their businesses linked with Point of Sales Linked Invoicing system. The flyers containing information about Point of Sales and gifts were distributed to the people on the occasion.

  • FBR amends guidelines for performance allowance of BS-01-14 tax officials

    FBR amends guidelines for performance allowance of BS-01-14 tax officials

    KARACHI: Federal Board of Revenue (FBR) has delegated powers to head of respective field formations of approving performance allowance of BS-1 to BS-14.

    The FBR issued Circular No. 01/2020 dated February 06, 2020 and modified Guidelines for Performance Allowance -2015.

    The following amendment has been made to the Guidelines for Performance Allowance-2015 with immediate effect:

    “The power to process and finalize selection of officials of BS-1 to BS-14 for IJP Performance Allowance of officials is delegated to the respective heads of field formations. However, all the cases of litigation and arrears demand shall continue to be dealt at FBR HQ by the respective Wing.”

    The FBR said that in the light of above decision of the Board-In-Council’s meeting held on January 24, 2020, the IJP selection process and finalization of IJP cases with respect to BS-01-14 employees of field formations will rest with concerned field formation.

    Under the approval of respective head of field office such cases shall be processed and finalized keeping in view Guidelines for Performance Allowance -2015 under intimation to the board.

  • Educational institutions share information of persons paying annual fee above Rs200,000

    Educational institutions share information of persons paying annual fee above Rs200,000

    KARACHI: Educational institutions have provided details of persons paying over Rs200,000 annual fee to Federal Board of Revenue (FBR).

    Sources in the FBR said that the educational institutions had provided the details of persons paying annual fee of above Rs200,000 along with the withholding tax statement for the period July – December 2019.

    They said that the educational institutions are required to provide details of persons paying fees including their names, address, CNIC and amount tax withheld.

    The sources said that being withholding agents the educational institutions are required to file withholding statements biannually. The withholding statement for the period July – December 2019/2020 was due on January 31, 2020.

    The educational institutions are required to withholding tax under Section 236I of Income Tax Ordinance, 2001.

    Section 236I: Collection of advance tax by educational institutions.

    (1) There shall be collected advance tax at the rate specified in Division XVI of Part-IV of the First Schedule i.e. five percent 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.”

  • Tax payable reduced to half on income from low cost housing projects

    Tax payable reduced to half on income from low cost housing projects

    KARACHI: The Federal Board of Revenue (FBR) has announced a significant tax incentive to promote affordable housing in Pakistan. According to official sources, the income tax on profits and gains earned by a person from low-cost housing projects shall be reduced by 50 percent.

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  • Anti-Benami transactions rules notified as per law: FBR

    Anti-Benami transactions rules notified as per law: FBR

    ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday said that Benami Transactions (Prohibition) Rules, 2019 has been issued in accordance with the law.

    The FBR issued a rebuttal on a news item published in a daily on February 5, 2020 about the issuance of Benami Transactions (Prohibition) Rules, 2019.

    FBR has explained that Benami Transactions (Prohibition) Rules, 2019 under Benami Transactions (Prohibition), Act, 2017 were notified through SRO. 326(l)/2019 dated 11th March, 2019 by Dr. Hamid Ateeq Sarwar, Additional Secretary (IRS/BS-21 Officer).

    He is also holding the charge of Member (IR-Policy), FBR (HQ) since 4th December, 2018 vide FBR’s Notification No. 2236-IR-I/2018.

    It is further clarified that all the Members of FBR hold the ex-officio rank of Additional Secretary as per Establishment Division’s Notification dated March 18, 1987.

    It is pertinent to mention at the time of issuance of instant SRO Mohammad Jehanzeb Khan (BS-22 officer of PAS) was holding the charge of Chairman, FBR / Secretary Revenue Division.

    After final vetting of Benami Transactions (Prohibition), Rules 2019 by Law & Justice Division and approval of the same by Cabinet Committee for Disposal of Legislative Cases (CCLC), the Summary containing the Benami Transactions (Prohibition) Rules, 2019 was moved by Mohammad Jehanzeb Khan Chairman, FBR / Secretary Revenue Division for the approval of Federal Cabinet.

    The whole process of issuance of SRO and initiation of Summary for approval of Federal Cabinet is in legal conformity.

  • Shabbar Zaidi still chairman, to resume charge after leave: FBR

    Shabbar Zaidi still chairman, to resume charge after leave: FBR

    ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday said that Syed Shabbar Zaidi is still Chairman of the FBR but he is on leave.

    While clarifying new reports about the vacancy of office of Chairman, FBR, Dr. Hamid Ateeq Sarwar, Spokesperson for the FBR / Member (IR-Policy) clarified that Syed Muhammad Shabbar Zaidi, Chairman, FBR is on medical leave and he will assume the charge of Chairman, FBR as soon as he gets medically fit.

    However, the position of Chairman, FBR during the leave period of Syed Muhammad Shabbar Zaidi is not lying vacant and Ms. Nausheen Javaid Amjad (IRS/BS-22 Officer) is holding the Look After Charge of the Chairperson, FBR as notified by FBR’s Notification No. 0184-IR-I/2020 dated January 31, 2020.

  • FBR conducts audit of all refund cases

    FBR conducts audit of all refund cases

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday said that the tax machinery conducts audit of all refund cases.

    “It is baseless to assume that FBR does not conduct the scrutiny. The processing of the case may take time but it is certain that all refund cases are audited,” the FBR said.

    In this regard, the FBR issued a clarification on the news aired on electronic media about the issuance of fake refunds.

    FBR has explained that two processes are being used to deal with refund cases.

    The first is the processing of refunds through automated system for the exporters.

    In this process, the audit of the refund is conducted after the issuance of refunds.

    The other system of refund issuance has been devised for the taxpayers not associated with the export sector.

    The refunds issued through this mode are called the “carry forward refunds.” Such refunds are issued once in a year. The audit is conducted before the issuance of such refunds.

    FBR has clarified that taxpayers involved in presenting the wrong invoices are dealt strictly and recovery is made from them.

    Moreover, penalty and default surcharge is also imposed to curb this practice.

    Sometimes, the audit process of refunds takes longer period of time which may cause problem of liquidity for the exporter, in case of delayed issuance of refunds.

    To avert liquidity crunch for the businesses, the refunds are issued and the scrutiny is conducted afterwards.

    There are certain inbuilt checks within the system to match the input claim by one person with output claim by another person.

    To avoid revenue loss, FBR has almost resolved the issue of fake invoices. Sometimes, it becomes a little cumbersome and lengthy to check the flying invoices but the scrutiny is conducted in all the cases. FBR has computer analytics system of CREST.

  • Income tax return filing hit record high of 2.78 million

    Income tax return filing hit record high of 2.78 million

    ISLAMABAD: The income tax return filing of tax year 2018 has reached to record high of 2.785 million by February 02, 2020, according to latest Active Taxpayers List (ATL) issued by Federal Board of Revenue (FBR) on Monday.

    The FBR sources said that the actual number of return filers is higher than the persons appeared on the ATL. They said that those people filing return without penalty amount would not qualify for the ATL.

    The record increase in return filing has been attributed to the amendment to Income Tax Ordinance, 2001 through Finance Act, 2019.

    In the last budget 2019/2020 a new Tenth Schedule was inserted to Income Tax Ordinance, 2001 under which persons not appearing on ATL would liable to pay 100 percent more withholding tax on certain transactions.

    The ATL for tax year 2018 issued on March 01, 2019 in which 1.59 million names were appeared of those taxpayer, who filed their returns by due date.

    However, later the FBR granted extension in date for filing returns due to introduction of a tax amnesty scheme.

    The extension for filing income tax returns for tax year 2018 was granted up to August 09, 2019.

    The return filing up to August 09, 2019 for tax year 2018 jumped up to 2.5 million from 1.59 million returns, which were part of the first ATL issued March 01, 2019.

    The insertion of Tenth Schedule to Income Tax Ordinance, 2001 speed up the return filing by taxpayers in order to avoid higher tax rate on certain transactions.

    Previously, people filing their annual income tax returns after due date were not allowed to appear on the ATL. However, another provision was added to the main statute under which persons by paying penalty can include their name to ATL.

    Therefore, since August 09, 2019 the FBR received around 285,000 tax returns for tax year 2018 till February 02, 2020.

    The FBR will issue ATL for tax year 2019 on March 01, 2020 and till then the prevailing ATL will be applicable for the purpose of withholding tax rates on certain transactions.

  • FBR gets CNIC details of motor vehicle buyers

    FBR gets CNIC details of motor vehicle buyers

    KARACHI: Motor vehicle manufacturers and dealers have shared details of Computerized National Identity Card (CNIC) of buyers with the Federal Board of Revenue (FBR), sources said on Monday.

    The sources said that the FBR has received the information of buyers who made purchases during first half (July – December) of current fiscal year.

    Besides manufacturers and dealers of motor vehicles, registration authorities, banks and leasing company have also provided details of buyers for the period.

    The FBR gets details of purchasers, included: name and address of purchaser/lessee; NTN/CNIC of purchaser/lessee; registration of number of motor vehicle; motor vehicle make, model, engine capacity; year of manufacture; date of first registration of the vehicles in Pakistan; registered capacity/laden weight of the vehicle; and ex-factor price of motor vehicle.

    The withholding agents as defined above are liable to collect withholding tax under Section 231B of the Income Tax Ordinance, 2001.

    As per Section 231 of the Ordinance, every motor vehicle registering authority of Excise and Taxation Department shall collect advance tax at the time of registration of a motor vehicle.

    Further, every leasing company or a scheduled bank or non-banking financial institution or an investment bank or a modaraba or a development finance institution, whether sharia compliant or under conventional mode, also require to collect withholding tax at the time of leasing of motor vehicle.

    The FBR sources said that huge undeclared money was used for purchase of motor vehicles. Therefore, the FBR will identify persons on the basis of information received, who are not in the tax net.

    As per Section 114 of the Income Tax Ordinance, 2001 every person own 1000CC and above motor vehicles are required to file annual income tax return.

  • Chartered accountants liable to penal action for issuing false tax certificate

    Chartered accountants liable to penal action for issuing false tax certificate

    KARACHI: Any auditor of professional accountancy firm is liable to penal action in case found guilty of misconduct in furnishing false tax certificate, sources in Federal Board of Revenue (FBR) said.

    Referring to Section 8B of Sales Tax Act, 1990, the sources said that tax authorities allowed input tax adjustment to a taxpayer on the basis of certificate issued by auditors of professional accountancy firms.

    “Any auditor found guilty of misconduct in furnishing the certificate mentioned in sub-section (2) shall be referred to the Council for disciplinary action under section 20D of Chartered Accountants, Ordinance, 1961,” according to Sales Tax Act, 1990.

    Section 20D of Chartered Accountants Ordinance, 1961 explains:

    “20-D. Orders by the Council if member found guilty.-(1) If, on receipt of the report under Section 20-B the Council is of opinion that the member of the Institute has been guilty of any professional misconduct specified in Schedule I, it may, after affording such member an opportunity of being heard, either personally or through counsel or another member of the Institute, make any of the following orders, namely:-

    (a) Reprimand or warn such member;

    (b) Impose such penalty as it may deem necessary not exceeding one thousand rupees; and

    (c) Remove the name of such member from the Register for a period not exceeding five years:

    Provided that, where it appears to the Council that the case is one in which the name of such member ought to be removed from the Register for a period exceeding five years or permanently, he shall not make any order but shall refer the case to the High Court with its recommendations thereon.

    (2) If the Council is of opinion that the member of the Institute is guilty of a professional misconduct specified in Schedule II, it shall refer the case to the High Court with its recommendations thereon.

    According to Section 8B of Sales Tax Act, 1990 taxpayers have not been allowed to adjust input tax except for some cases.

    Following is Section 8B of the Act:

    “8B. Adjustable input tax.– (1) Notwithstanding anything contained in this Act, in relation to a tax period, a registered person shall not be allowed to adjust input tax in excess of ninety per cent of the output tax for that tax period:

    Provided that the restriction on the adjustment of input tax in excess of ninety percent of the output tax, shall not apply in case of fixed assets or Capital goods:

    Provided further that the Board may by notification in the official Gazette, exclude any person or class of persons from the purview of sub-section (1).

    (2) A registered person, subject to sub-section (1), may be allowed adjustment or refund of input tax not allowed under sub-section (1) subject to the following conditions, namely:–

    (i) in the case of registered persons, whose accounts are subject to audit under the Companies Ordinance, 1984, upon furnishing a statement along with annual audited accounts, duly certified by the auditors, showing value additions less than the limit prescribed under sub-section (1) above; or

    (ii) in case of other registered persons, subject to the conditions and restrictions as may be specified by the Board by notification in the official Gazette.

    (3) The adjustment or refund of input tax mentioned in sub-sections (2), if any, shall be made on yearly basis in the second month following the end of the financial year of the registered person.

    (4) Notwithstanding anything contained in sub-sections (1) and (2), the Board may, by notification in the official Gazette, prescribe any other limit of input tax adjustment for any person or class of persons.

    (5) Any auditor found guilty of misconduct in furnishing the certificate mentioned in sub-section (2) shall be referred to the Council for disciplinary action under section 20D of Chartered Accountants, Ordinance, 1961 (X of 1961).

    (6) In case a Tier-1 retailer does not integrate his retail outlet in the manner as prescribed under sub-section (9A) of section 3, during a tax period or part thereof, the adjustable input tax for whole of that tax period shall be reduced by 15 percent.”