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 urges return filing for tax broadening

ISLAMABAD: Federal Board of Revenue (FBR) has urged people to file their income tax returns for broadening of tax base.

In a tweet on Wednesday, the FBR said that individuals having annual income above Rs400,000 are required to file their income tax returns for tax year 2019.

The FBR urged that persons having taxable income should play their part to broaden the tax base and become active taxpayers.

The last date for filing income tax returns for tax year 2019 is January 31, 2020.

The FBR has already extended the date from September 30, 2019 in order to facilitate the taxpayers in discharging their liabilities.

The FBR will issue the Active Taxpayers List (ATL) for tax year 2019 on March 01, 2020. This list will carry the names of those taxpayers who file their returns for the said tax year.

In case of non-filing of returns, taxpayers will liable to pay 100 percent additional withholding tax on various transactions.

January 29, 2020
FBR issues list of software vendors for integrating big retailers’ sales

ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday issued list of vendors providing software for integrating sales of big retailers with the tax machinery.

The FBR said that the list of vendors who have provided Point of Sales (POS) softwares to those retailers who have integrated their POSs with FBR.

The list is in alphabetical order and the retailers may approach and engage any of them that they find suitable after due diligence.

Following is the list of vendors:

ABUZAR CONSULTANCY, Karachi, 021-32005755

AWA SOFTWARE, Karachi, (021) 34973694

COMPUTER INFORMATION SERVICES PVT LTD, Karachi, 021-34521329

CONFIZ LIMITED, Lahore, (042) 35717906, Zainulabidin 0321-4711101, Hamid Rasheed 0333-4741004, Faheem Karachi 0322-4566589

DELTA SOFT, Faisalabad, 041-8721577, 0301 7104466

DEVELOPER ZONE, Mobile, 0306 5619198

DYNEXCEL , Faisalabad, (041) 8500733

EZEE TECH TARIQ JAMIL, Mobile, 0321-4012074

EZI SOLUTION, Mobile, 0321 4598991

G. Tech, Karachi , Muhammad Ahsan Naeem 0323-8023327

GENTEC, Karachi, (021) 34167766

HISAAB.PK, Mobile, 0300 8296954

INTELLECT SOLUTIONS, Karachi, 021-35651576-7

IPOS, Mobile, 0333 5413847

ITRESOURCES, Mobile, 0306 2450000

ITSTECHWORLD.COM, Mobile, 0321-647-2001

LUMENSOFT, Lahore, (042) 111 290 290, Abdul Jabbar 0346-7999797

MAALIK CREATIVE ENGINEERS, Islamabad/RWP, (051) 2204040

MAALIK CREATIVE ENGINEERS, Islamabad/RWP, (051) 2204040

MAISON CONSULTING, Mobile, 0321 8450197

MANTAQ SYSTEMS, Lahore, (042) 32116687

MB COMMUNICATION, Islamabad/RWP, (051) 5700111

MIANTECH, Mobile, 0311 5679955

MILESTONE, Karachi, (021) 35148294

MILLENIUM SOFTWARE, Karachi, 02132582001-4

MTECH, Mobile, 0306 8512354

NETTECH, Islamabad/RWP, 051-8356632

NETTECH TECHNOLOGY, Islamabad/RWP, 051-8356632

NUBIT SOFTWARE (PVT) LTD, Karachi, (021) – 32428197

PAKISTANWEBHOST, Mobile, 0334 5662119

RETAIL PRO INTERNATIONAL, LLC, Mobile, 0345-888-7875

Sidat Haider Murshid Asociates, Lahore, 042-35789725

SOFTWORLD, Mobile, 0321 9436268

SOLUTION XPERT, Mobile, 0333 8112161

SULEMAN SWEETS, Mobile, 0333 8112161

System Plus, Lahore, (042) 37184805

SYSTEMS LIMITED, Lahore, (042) 111 797 836, Imran Khan 0313-5289270

TECHNOSYS, Mobile, 0334 396 8215

TECHNOSYS , Karachi, (021) 34325117

TMR Consulting Pvt Ltd, Islamabad, Munawar 0324-4235028

TRIOBYTE, Mobile, 0333 3490585

UNICON INTERNATIONAL PVT LTD., Karachi, (021) 5071161-65

UNIVERSAL NETWORK SYSTEMS, Karachi, (021) 34327917

WASEELA, Islamabad/RWP, (051) 111 962 962

YEHPOS, Islamabad/RWP, 051-8356632

YY TECH, Karachi, (021) 35346500

January 28, 2020
FBR warns legal action against non filers

KARACHI: Federal Board of Revenue (FBR) on Monday warned persons having taxable income to file their annual returns for tax year 2019 otherwise tax authorities will initiate legal proceedings.

The FBR issued reminder for persons having taxable income but so far unable to file their annual returns for tax year 2019.

The FBR said that the last date for filing income tax returns is January 31, 2020. It said that filing of income tax return is mandatory for all persons with annual income of Rs400,000 or more.

The tax body warned that in case individual/company fails to file their returns by due date, the FBR will assess the applicable tax without serving any notice.

It highlighted the disadvantages of not filing or late filing the returns as those persons would not be part of Active Taxpayers List (ATL).

The FBR said that non appearance on ATL the withholding tax will be charged at double rates.

Further, the FBR will initiate legal action that may result into imprisonment of one to three years. Besides, fine will be charged on late submission of income tax returns.

The FBR explain the procedure to file income tax returns. It said that an individual should login to IRIS with username and password; click on declaration tab after login; select tax year; select the form for relevant category; click on verification after entering details such as salary slip, bank statement, utility bill, tax statement, expenditure and assets etc.

January 27, 2020
FBR directs education institutions to provide details of persons paying annual fee above Rs200,000

ISLAMABAD: Federal Board of Revenue (FBR) has directed educational institutions to provide details of persons paying annual fee above Rs200,000 in next three days.

Sources in FBR said that educational institutions including schools, colleges, universities, tuition centers, technical institutions etc. had been asked to provide details of parents or individuals paying annual fee above Rs200,000 by January 31, 2020.

The educational institutions have been directed to provide complete details of persons paying fees, which should include, name, address, CNIC amount of fee and tax deducted/withheld for the tax year 2020.

The sources said that the educational institutions would provide the details along with their biannual withholding statement due on January 31, 2020.

They said that under Section 236I of Income Tax Ordinance, 2001 educational institutions are required to collect withholding tax at five percent on gross amount of fee from person paying fee.

The section read as:

“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 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.”

The rate of collection of tax under section 236I shall be 5 percent of the amount of fee.

January 27, 2020
FBR monitors immovable property transactions to enforce fair market values

KARACHI: Federal Board of Revenue (FBR) is monitoring transactions of immovable properties to check sales and purchases on fair market value, sources told PkRevenue.com.

The sources said that the FBR had reduced the withholding tax rate to one percent from July 01, 2019 to be collected from purchaser of immovable properties. However, this rate should be two percent in case the buyer is not listed on the Active Taxpayers List (ATL).

The sources said that the tax offices had been asked to monitor the transaction of immovable properties under the new rates with true declaration of amount.

The sources said that the FBR was fully aware about the size of undeclared money invested in the real estate business. Therefore, the monitoring was started. However, comprehensive data of buyers and sellers will be provided by withholding agents to the FBR by January 31, 2020.

The sources said that the withholding agents for immovable transactions are those persons registering, recording or attesting or transfer including local authorities, housing authorities, Housing Society, Co-operative Society and registrar or properties.

They said that tax offices would start massive crackdown after receiving the data from withholding agents.

They said that people were not declaring true values of immovable properties at the time of registration or transfer, which was causing massive loss to national exchequer.

They further said that by concealing the true amount, buyers and sellers were also promoting black economy.

The sources said that withholding agents would provide details of buyers and sellers, including names, addresses, CNICs, declared value and amount of tax withheld.

The FBR sources the tax authorities would examine the mode of payment and compare the declared value with the prices prevailed in the open market.

They said that after conducting examination the tax authorities would ask buyers and sellers of immovable properties to file income tax returns, in case those persons were not in the tax net.

January 26, 2020
Tax collection increases by 93% on salary income of executives, directors

KARACHI: The tax collection from salary income of companies’ directors has increased by 93 percent during first six months of current fiscal year.

According to Large Taxpayers Unit (LTU) Karachi, the major revenue arm of Federal Board of Revenue (FBR), the tax collection increased to Rs2.7 billion during first half (July – December) of current fiscal year as compared with Rs1.4 billion in the corresponding period of the last fiscal year.

The tax officials of LTU Karachi attributed the increase in tax revenue under this head to revision in salary slabs in the budget 2019/2020 which is effective from July 01, 2019.

They said that the tax slab was increased to 35 percent on the salary income above Rs75 million.

The tax officials also attributed the increase in tax revenue to effective monitoring and audit of executives /directors of companies.

They said that previously directors of companies avoid taxes by taking advantage of tax laws.

The salary income has been explained in section 12 of Income Tax Ordinance, 2001.

Salary.— (1) Any salary received by an employee in a tax year, other than salary that is exempt from tax under this Ordinance, shall be chargeable to tax in that year under the head “Salary”.

(2) Salary means any amount received by an employee from any employment, whether of a revenue or capital nature, including —

(a) any pay, wages or other remuneration provided to an employee, including leave pay, payment in lieu of leave, overtime payment, bonus, commission, fees, gratuity or work condition supplements (such as for unpleasant or dangerous working conditions);

(b) any perquisite, whether convertible to money or not;

(c) the amount of any allowance provided by an employer to an employee including a cost of living, subsistence, rent, utilities, education, entertainment or travel allowance, but shall not include any allowance solely expended in the performance of the employee’s duties of employment;

(d) the amount of any expenditure incurred by an employee that is paid or reimbursed by the employer, other than expenditure incurred on behalf of the employer in the performance of the employee’s duties of employment;

(e) the amount of any profits in lieu of, or in addition to, salary or wages, including any amount received —

(i) as consideration for a person’s agreement to enter into an employment relationship;

(ii) as consideration for an employee’s agreement to any conditions of employment or any changes to the employee’s conditions of employment;

(iii) on termination of employment, whether paid voluntarily or under an agreement, including any compensation for redundancy or loss of employment and golden handshake payments;

(iv) from a provident or other fund, to the extent to which the amount is not a repayment of contributions made by the employee to the fund in respect of which the employee was not entitled to a deduction; and

(v) as consideration for an employee’s agreement to a restrictive covenant in respect of any past, present or prospective employment;

(f) any pension or annuity, or any supplement to a pension or annuity; and

(g) any amount chargeable to tax as “Salary” under section 14.

(3) Where an employer agrees to pay the tax chargeable on an employee’s salary, the amount of the employee’s income chargeable under the head “Salary” shall be grossed up by the amount of tax payable by the employer.

(4) No deduction shall be allowed for any expenditure incurred by an employee in deriving amounts chargeable to tax under the head “Salary”.

(5) For the purposes of this Ordinance, an amount or perquisite shall be treated as received by an employee from any employment regardless of whether the amount or perquisite is paid or provided —

(a) by the employee’s employer, an associate of the employer, or by a third party under an arrangement with the employer or an associate of the employer;

(b) by a past employer or a prospective employer; or

(c) to the employee or to an associate of the employee or to a third party under an agreement with the employee or an associate of the employee.

January 26, 2020
CNIC condition not to apply on purchases by end consumers

KARACHI: The requirement of Computerized National Identity Card (CNIC) is not applicable on purchases above Rs50,000 made by end consumers, tax officials said on Friday.

They said that the condition of CNIC will be applicable from February 01, 2020 on sales by registered persons to unregistered persons.

Every registered person is required to collect information of buyer making purchases above Rs50,000.

The officials said that the condition of CNIC shall not apply on ordinary consumer, which means a person who is buying the goods for his own consumption and not for the purpose of re-sale or processing.

Through Finance Act, 2019, it was made mandatory that a registered person making a taxable supply shall issue a serially numbered tax invoice at the time of supply of goods containing the following particulars, in Urdu or English language, namely: –

The condition of CNIC or NTN was made mandatory from August 01, 2019.

However, on opposition from small traders the government after an agreement on October 30, 2019, postponed the applicability of CNIC till January 31, 2020.

The FBR on October 04, 2019 issued definition / rules related to condition of CNIC.

The FBR said that keeping in view the problems reported by the registered persons is ensuring proper identity of the buyer to fulfil the requirement of reporting NTN/NIC of the buyer in terms of section 23 of the Sales Tax Act, 1990, it is directed that the NIC/NTN of the buyer with respect to taxable supplies to an unregistered person shall be deemed to have been reported in good faith by the supplier provided that:

(a) The tax invoice complies with the requirements of section 23(b) of the Act.

(b) Payment made by or on behalf of the unregistered purchaser of the amount of the tax invoice, inclusive of sales tax and applicable further tax, is deposited into the supplier’s declared business bank account.

(c) The NIC provided by the purchaser is found authenticated by the National Data and Registration Authority (NADRA).

(d) The NIC/NTN provided is not of the employee of the seller or of his associates as defined under the Income Tax Ordinance, 2001.

The issuance of a show cause notice to a registered person being a seller on account of any matter arising out of the NIC provided by a purchaser shall not be made without the prior approval of the Member (IR-Operations), FBR after providing an opportunity to be heard.

January 25, 2020
FBR not to compromise integrity of automated refund system

KARACHI: Federal Board of Revenue (FBR) has told the legislators that it will not compromise the integrity of automated sales tax refund system despite pressures from various quarters.

The FBR made a presentation before the standing committee of National Assembly on Finance, Revenue and Economic Affairs on Thursday. The officials of Large Taxpayers Unit (LTU) Karachi explained in detail about the newly launched Fully Automated Sales Tax e-Refund (FASTER).

The standing committee had asked the FBR to explain the automated sales tax refund system following hue and cry from the business community that their refunds under the newly launched system were stuck up and they were facing liquidity problems.

The FBR officials informed the standing committee the automated system was fully transparent and all doors had been closed for issuance of refunds on fake and flying invoices.

It was informed that in the last budget the zero rating of sales tax was abolished which was related to five export oriented sectors.

After withdrawal of SRO 1125(I)/2011, the items in the SROs had become subject to normal sales tax at 17 percent on import and local supply.

In this scenario all the inputs of exporters have become taxable which gave rise to refunds and liquidity issues.

However, the government resolved the issue of sales tax refunds of exporters through introduction of FASTER system, which applied from July 01 onwards.

It is informed that data provided in monthly returns is treated as data in support of refund claim and no separate electronic data is required. “The only requirement is filing of Annexure-H with 120 days of the filing of sales tax return.”

After filing, the claim is routed through processing module FASTER. Refund claim data is verified by the system and Refund Payment Order (RPO) of the amount found admissible is generated.

The FBR officials told that RPO was electronically communicated to the State Bank of Pakistan within 72 hours.

The standing committee was informed that refund claims, which were not verified through validation checks, are processed under STARR.

In order to resolve issues related to FASTER system, the FBR deputed focal persons in all field formations. Besides, chief automation and PRAL team is available through cell phones/ helpline to assist taxpayers.

Further, filing date of annexure – H has been extended up to February 15, 2020.

After the launch of FASTER system the issuance of refund payment registered unprecedented growth of 165 percent. According to the briefing the FBR released Rs36.82 billion during July 01- January 21 2019/2020 as compared with Rs13.9 billion in the corresponding period of the last fiscal year.

The issuance of refunds by LTU Karachi registered phenomenal growth of 317 percent to Rs7.89 billion during July 01 – January 21 2019/2020 as compared with Rs1.89 billion in the corresponding period of the last year.

January 24, 2020
Income above Rs400,000 must file annual return: FBR

ISLAMABAD: Federal Board of Revenue (FBR) on Friday said that individuals having income above Rs400,000 must file their income tax return for tax year 2019.

The FBR issued advice as one week remaining for due date the filing income tax return for tax year 2019.

The FBR urged people to file their annual income tax returns for documentation of economy and become active taxpayers.

The revenue body said that salaried persons have been facilitated in return filing through ‘Tax Asaan’ smart phone application.

It further said that the taxpayers have been facilitate in tax payment through ATM, Internet banking, debit card and direct debt from bank account.

The FBR reminded that the last date for filing income tax return for tax year 2019 is January 31, 2019.

The FBR has estimated around 2.77 million income tax returns for tax year 2019 to be filed by January 31, 2020.

The FBR extended the date for filing income tax returns for tax year 2019 up to January 31, 2020 for all type of taxpayers.

The FBR received around 2.17 million income tax returns for tax year 2019 by December 31, 2019.

Syed Shabbar Zaidi, Chairman, FBR in his meeting with Finance Advisor Dr. Abdul Hafeez Shaikh disclosed that the FBR had received 2.17 million income tax returns for tax year 2019. While another 600,000 returns likely to be received by extended date i.e. January 31, 2020.

The actual return filing date for tax year 2019 was September 30, 2019 for taxpayers including salaried persons, business individuals, persons falling in final tax regimes and companies having special tax year.

While, for corporate taxpayers the last date for filing income tax returns was December 31, 2019.

The FBR extended return filing date for other than corporate taxpayers around five times up to January 31, 2020. The FBR also extended the last date for corporate taxpayers up to January 31, 2020.

The FBR is expecting around 3.5 million income tax returns for tax year 2019, which may be filed after due date but with payment of fine and penalties.

Through Tenth Schedule of Income Tax Ordinance, 2001 the benefit of reduced withholding tax rates can only be availed by persons on the Active Taxpayers List (ATL).

Those persons failed to file their income tax returns by due date and file their returns after due date without payment of fine will not be able to find their place on the ATL.

The FBR will issue ATL for tax year 2019 on March 01, 2020.

The number of income tax return has increased to 2.7 million for tax year 2018. The ATL for tax year 2018 will expire on February 29, 2020.

January 24, 2020
CNIC is must on purchases above Rs50,000 from Feb 01

ISLAMABAD: The mandatory requirement of Computerized National Identity Card (CNIC) on purchases of above Rs50,000 to apply from February 01, 2020.

Sources in Federal Board of Revenue (FBR) on Wednesday said that the condition of CNIC on purchases above Rs50,000 will be applicable from February 01, 2020.

The FBR will take legal action against those who violate the mandatory requirement, they added.

Through Finance Act, 2019, it was made mandatory that a registered person making a taxable supply shall issue a serially numbered tax invoice at the time of supply of goods containing the following particulars, in Urdu or English language, namely: –

(a) name, address and registration number of the supplier;

(b) name, address and registration, number of the recipient and NIC or NTN of the unregistered person, as the case may be, excluding supplies made by a retailer where the transaction value inclusive of sales tax amount does not exceed rupees fifty thousand, if sale is being made to an ordinary consumer.

Explanation. – For the purpose of this clause, ordinary consumer means a person who is buying the goods for his own consumption and not for the purpose of re-sale or processing.

The condition of CNIC or NTN was made mandatory from August 01, 2019.

However, on opposition from small traders the government after an agreement on October 30, 2019, postponed the applicability of CNIC till January 31, 2020.

The FBR on October 04, 2019 issued definition / rules related to condition of CNIC.

The FBR said that keeping in view the problems reported by the registered persons is ensuring proper identity of the buyer to fulfil the requirement of reporting NTN/NIC of the buyer in terms of section 23 of the Sales Tax Act, 1990, it is directed that the NIC/NTN of the buyer with respect to taxable supplies to an unregistered person shall be deemed to have been reported in good faith by the supplier provided that:

(a) The tax invoice complies with the requirements of section 23(b) of the Act.

(b) Payment made by or on behalf of the unregistered purchaser of the amount of the tax invoice, inclusive of sales tax and applicable further tax, is deposited into the supplier’s declared business bank account.

(c) The NIC provided by the purchaser is found authenticated by the National Data and Registration Authority (NADRA).

(d) The NIC/NTN provided is not of the employee of the seller or of his associates as defined under the Income Tax Ordinance, 2001.

The issuance of a show cause notice to a registered person being a seller on account of any matter arising out of the NIC provided by a purchaser shall not be made without the prior approval of the Member (IR-Operations), FBR after providing an opportunity to be heard.

January 23, 2020