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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.

  • Hafeez Shaikh directs FBR to simplify Form-H within a week, expedite sales tax refund payment

    Hafeez Shaikh directs FBR to simplify Form-H within a week, expedite sales tax refund payment

    ISLAMABAD: Dr. Abdul Hafeez Shaikh, Adviser to the Prime Minister on Finance and Revenue, on Tuesday directed Federal Board of Revenue (FBR) to simplify form-H within a week and expedite payment of sales tax refunds.

    He gave the instruction during a meeting with the office-bearers and members of All Pakistan Textile Mills Association (APTMA).

    Adviser to the Prime Minister on Institutional Reforms & Austerity Dr Ishrat Hussain, Adviser to Prime Minister on Commerce, Textile, Industry and Production Abdul Razak Dawood, Chairman Task Force on Textile Ali Habib, Chairman FBR Syed Shabbar Zaidi, former finance minister Shaukat Tareen and Secretary Finance Naveed Kamran Baloch were also present among others.

    Dr Abdul Hafeez Shaikh told the exporters that the government was not at all interested in keeping their money held up for any length of time and the government was willing to listen to and accommodate any solution or recommendations from the exporters to simplify the H-Form and ensure a prompt payment of sales tax refunds to them.

    He also directed the FBR to expedite the payment of nearly Rs 10 billion worth of customs duty drawback to the exporters.

    FBR Chairman Shabbar Zaidi told the meeting that FBR had so far received claims for sales tax refunds to the tune of Rs 10.14 billion pertaining to the period from July to October 2019 and cases amounting to Rs 8.02 billion had already been processed for payment out of which 1604 cases has been accepted for payment which would be made at the earliest.

    Earlier, the APTMA leaders and members told the Adviser they were happy and satisfied with the documentation drive of the government and wanted to process their claims for sales tax refunds through the newly-introduced Form-H.

    They said they had formulated their recommendations to further simplify the Form-H in view of certain problems being faced by them in filling out the form.

  • FBR chairman warns non-compliant immovable property, motor vehicle owners of penal action

    FBR chairman warns non-compliant immovable property, motor vehicle owners of penal action

    ISLAMABAD: Syed Shabbar Zaidi, Chairman, Federal Board of Revenue (FBR) has warned of taking penal action against non-compliant persons own immovable properties and motor vehicles.

    The chairman in a tweet message on Monday urged taxpayers to avail extension in income tax return filing date up to December 16, 2019.

    He said that every person owning a car above 1000CC and house measuring 500 square yards or above is required to file income tax return.

    The FBR on November 29, 2019 granted third extension in date for filing income tax returns for tax year 2019.

    Under Section 114 of Income Tax Ordinance, 2001 following classes of persons and companies are required to file annual income tax returns:

    114. Return of income.

    (1) Subject to this Ordinance, the following persons are required to furnish a return of income for a tax year, namely:–

    (a) every company;

    (ab) every person (other than a company) whose taxable income for the year exceeds the maximum amount that is not chargeable to tax under this Ordinance for the year;or

    (ac) any non-profit organization as defined in clause (36) of section 2;

    (ad) any welfare institution approved under clause (58) of Part I of the Second Schedule;

    (b) any person not covered by clause (a), (ab), (ac) or (ad) who,—

    (i) has been charged to tax in respect of any of the two preceding tax years;

    (ii) claims a loss carried forward under this Ordinance for a tax year;

    (iii) owns immovable property with a land area of five hundred square yards or more or owns any flat located in areas falling within the municipal limits existing immediately before the commencement of Local Government laws in the provinces; or areas in a Cantonment; or the Islamabad Capital Territory;

    (iv) owns immoveable property with a land area of five hundred square yards or more located in a rating area;

    (v) owns a flat having covered area of two thousand square feet or more located in a rating area;

    (vi) owns a motor vehicle having engine capacity above 1000 CC;

    (vii) has obtained National Tax Number; or

    (viii) is the holder of commercial or industrial connection of electricity where the amount of annual bill exceeds rupees five hundred thousand;

    (ix) is a resident person registered with any chamber of commerce and industry or any trade or business association or any market committee or any professional body including Pakistan Engineering Council, Pakistan Medical and Dental Council, Pakistan Bar Council or any Provincial Bar Council, Institute of Chartered Accountants of Pakistan or Institute of Cost and Management Accountants of Pakistan; or

    (x) every resident person being an individual required to file foreign income and assets statement under section 116A.

    (1A) Every individual whose income under the head ‘Income from business’ exceeds rupees three hundred thousand but does not exceed rupees four hundred thousand in a tax year is also required to furnish return of income from the tax year.

  • Salary income to include all allowances for tax determination

    Salary income to include all allowances for tax determination

    KARACHI: Federal Board of Revenue (FBR) has said that for determination of tax the salary income shall include the value of all perquisites, allowances and benefits received by employees.

    FBR officials said on Tuesday that the salaried persons should include all such income while filing their annual income tax returns, if their employers had not deducted tax on such prerequisites.

    For the purposes of computing the income chargeable to tax under the head ‘salary’, the value of all perquisites, allowances and benefits provided by the employer to the employee shall be included in the said income.

    The value of accommodation provided by an employer to the employee shall be taken equal to the amount that would have been paid by the employer in case such accommodation was not provided.

    Provided that the value taken for this purpose shall, in any case, not be less than forty five percent of the minimum of the time scale of the basic salary or the basic salary where there is no time scale.

    Provided further that where House Rent Allowance is admissible at the rate of thirty percent, the value taken for the purpose of this rule shall be an amount not less than thirty percent of minimum of the time scale of basic salary or the basic salary where there is no time scale.]

    The value of conveyance provided by the employer to the employee shall be taken equal to an amount as below:- (i)

    Partly for personal and partly for official use

    The tax rate shall be five percent of:

    (a) the cost to the employer for acquiring the motor vehicle; or,

    (b) the fair market value of the motor vehicle at the commencement of the lease, if the motor vehicle is taken on lease by the employer;

    For personal use only

    The tax rate shall be 10 percent of:

    (a) the cost to the employer for acquiring the motor vehicle; or,

    (b) the fair market value of the motor vehicle at the commencement of the lease, if the motor vehicle is taken on lease by the employer; and

    For the purpose of this part, “employee” includes a director of a company.

  • Property tax collection sharply rises by 214 percent

    Property tax collection sharply rises by 214 percent

    KARACHI: The collection of property tax witnessed unprecedented growth of 214 percent owing to back to back increase in valuation of immovable properties by Federal Board of Revenue (FBR), sources said.

    The quarterly data released by the finance ministry revealed that the provinces had collected property tax to the tune of Rs7.8 billion during first quarter (July – September) 2019/2020 as compared with Rs2.48 billion in the corresponding period of the last fiscal year.

    The sources attributed the significant rise in property tax to increase in FBR valuation which was introduced in August 2016 and increased by 20 percent in February 2019 and further increased with the same ratio in July 2019.

    The provinces have jurisdiction over the collection of property tax in the shape of rented properties in their respective localities.

    The sources said that with the increase of FBR valuation the provinces could able to increase their revenue because the rent agreements are being made on the basis of existing valuation.

    On the other hand the valuations of immovable properties notified by the provinces are very low comparing the open market values. However, under the proposed reform program funded by the World Bank the provinces may review their valuations of immovable properties.

    The major increase in property tax comes from Punjab as the province collected Rs6 billion during first quarter of the current fiscal year.

    It was followed by Sindh, which collected Rs1.5 billion, Khyber Pakhtoonkhwa collected Rs243 million and Balochistan collected Rs89 million.

    The sources said that digitalization of property record and effective measures of documentation would further help the provinces to increase the revenue collection under the head of property tax.

  • FBR collects Rs1,617 billion in five months; shortfall increases by Rs206 billion

    FBR collects Rs1,617 billion in five months; shortfall increases by Rs206 billion

    ISLAMABAD: The shortfall in revenue collection by Federal Board of Revenue (FBR) has soared to Rs206 billion during first five months (July – November) 2019/2020 making it more difficult for revenue authorities to achieve full year target of Rs5,550 billion.

    As per the revenue collection till Friday evening, the FBR provisionally collected Rs1617 billion during July – November 2019/2020 as compared with the five – month target of Rs1,829 billion.

    The FBR sources said that the provisional figures may increase to Rs1623 billion after finalization of collection.

    However, the FBR achieved 17 percent growth in first five months by collecting Rs1617 billion when compared with Rs1383 billion in the corresponding months of the last fiscal year.

    In the month of November 2019 the FBR collected Rs334 billion, which is 18 percent higher when compared with Rs282 billion in the same month of the last year.

    The FBR also missed the monthly target for the month of November 2019, which was Rs381 billion.

    It is worth mentioning here that the collection for fiscal year 2018/2019 had posted negative growth in 51 years.

  • Information of account holders to be furnished by banks under Section 165A

    Information of account holders to be furnished by banks under Section 165A

    KARACHI: Federal Board of Revenue (FBR) and banks have agreed on sharing information of financial transactions made by account holders.

    The information to be furnished by the banks was to be implemented in 2013 but due to litigation it was not enforced.

    However, on November 27, 2019 the banks, in a meeting with FBR chairman, agreed to provide information of transactions. They also agreed to withdraw cases filed against implementation of Section 165A.

    The Section 165A was introduced to Income Tax Ordinance, 2001 through Finance Act, 2013.

    165A. Furnishing of information by banks

    (1) Notwithstanding anything contained in any law for the time being in force including but not limited to the Banking Companies Ordinance, 1962 (LVII of 1962), the Protection of Economic Reforms Act, 1992 (XII of 1992), the Foreign Exchange Regulation Act, 1947 (VII of 1947) and the regulations made under the State Bank of Pakistan Act, 1956 (XXXIII of 1956), if any, on the subject every banking company shall make arrangements to provide to the Board in the prescribed form and manner,—

    (a) a list of persons containing particulars of cash withdrawals exceeding fifty thousand Rupees in a day and tax deductions thereon, aggregating to Rupees one million or more during each preceding calendar month.”

    (b) a list containing particulars of deposits aggregating rupees ten million or more made during the preceding calendar month;

    (c) a list of payments made by any person against bills raised in respect of a credit card issued to that person, aggregating to rupees two hundred thousand or more during the preceding calendar month;

    (d) a list of persons receiving profit on debt exceeding five hundred thousand rupees and tax deductions thereon during preceding financial year.

    (2) Each banking company shall also make arrangements to nominate a senior officer at the head office to coordinate with the Board for provision of any information and documents in addition to those listed in sub-section (1), as may be required by the Board.

    (3) The banking companies and their officers shall not be liable to any civil, criminal or disciplinary proceedings against them for furnishing information required under this Ordinance.

    (5) Subject to section 216, all information received under this section shall be used only for tax purposes and kept confidential.

  • Exporters claim Rs62 billion fresh refunds stuck up despite FBR’s 72-hour clearance assurance

    Exporters claim Rs62 billion fresh refunds stuck up despite FBR’s 72-hour clearance assurance

    KARACHI: The new 72-hour sales tax refund clearance strategy of Federal Board of Revenue (FBR) has failed as another Rs62 billion refunds were stuck up since launch of the new systems, exporters said.

    Muhammad Jawed Bilwani, Chairman, Pakistan Apparel Forum in a statement on Friday said that around Rs62 billion of textile exporters liquidity held up with the government under FASTER Refund System in last 4 months, after imposition of 17 percent Sales Tax on Exports.

    Before abolishing SRO 1125 – zero percent sales tax for five export oriented industries –the government committed that sales tax refund claims payments will be paid immediately after submission of GD like Bangladesh Model.

    Contrary to Bangladesh Refund Model, Govt. launched FASTER by which sales tax refunds to be paid within 72 hours electronically. New FASTER system has been failed and FBR processing claims manually and SBP paying refund on advice of FBR.

    He said that huge amount of exporters’ liquidity of billions of rupees in Sales Tax Refund, Custom Rebate, Withholding Tax, DDT and DLTL has been stuck up with the government causing great sufferings to the already burdened exporters who are now at a loss to understand how to make both ends meet and such an alarming situation will ruin the export business of the Value Added Textile Exporters.

    On the demand of exporters, the government has withdrawn Refund Bonds electronically but payments against refund bonds have not been paid yet to the exporters, he informed.

    FBR also claimed that Custom Rebates shall be paid electronically with Export Proceeds as a result of system automation, however, the plan has not been turned into reality but previous backlog of eight months have been increased to twelve months.

    He added that due to financial hardships, Value Added Textile SMEs are not taking new export orders.

    It is pertinent to note that meager increase in the exports of value added textile sector due to previous policies of Government before Budget 2019-20.

    The impact of the policies of current Budget 2019-20 will be arrived in 2020 calendar year. It is a great irony that FBR vide SRO 747(I)/2019 dated 9th July, 2019 has withdrawn the exemption of sales tax and federal excise duty on buying of locally procured input goods by Export Oriented Units under SRO327.

    This Scheme was introduced on the pattern of Export Processing Zone (EPZ) where there is no taxes on buying of locally procured input goods and no taxes on utilities.

    Industries registered in Export Oriented Units (EOU) are liable to export 80% of their annual production. FBR should withdraw amendment to omit the clause 10 sub-section (b) and (c) of the Export Oriented Units and Small and Medium Enterprises Rules, 2008 so that exporters operating under Export Oriented Units can procure input goods without taxes as this is the safest scheme and item-wise individual analysis card is submitted in WEBOC.

    He said that exporters have a gut feeling that FBR with its harsh policies is trying to destroy value added textile export sector which is the largest export sector and labour intensive.

    It is an alarming situation that new comers are not interested in the business of export sector due to harsh incumbent government policies. Our existing Export Industry gets spillover orders from the international buyers and is surviving due to economy of scale and efficiency in the production.

    He demanded that government should clear all pending refund payments of exporters forthwith and restore zero rating (0%) of sales tax – no payment no refund regime in the best interest of exports, economy, foreign exchange earnings, employment etc.

  • Income tax return filing date extended to December 16

    Income tax return filing date extended to December 16

    In a significant relief for taxpayers, the Federal Board of Revenue (FBR) has once again extended the deadline for filing income tax returns and wealth statements for the tax year 2019. According to FBR’s latest notification – Circular No. 16/2019 – the new date for submission has been set as December 16, 2019, offering individuals and companies a final opportunity to comply with their tax obligations.

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  • FBR, PBA agree on sharing account holders information; banks to withdraw court cases

    FBR, PBA agree on sharing account holders information; banks to withdraw court cases

    KARACHI: Federal Board of Revenue (FBR) has made major breakthrough regarding obtaining information of bank account holders ahead of FATF review.

    The FBR and commercial banks agreed on sharing information of financial transactions by account holders, which was remained under litigation since 2013.

    The FBR sources said that it would help the tax machinery to identify the movement of black economy and also ensure compliance to FATF conditions regarding prevention of money laundering and other fiscal crimes.

    The FATF next review is scheduled in February 2020 to decide Pakistan status, as the country is presently in the grey list.

    FBR chairman Syed Shabbar Zaidi in a tweet message on Friday said: “On behalf of FBR, I thank Pakistan Bank Association and Presidents of all the banks for agreeing to withdraw pending litigation on the matter of furnishing of certain information. This positivity has been achieved by mutual consultation. A way forward of cooperation has opened.”

    In a meeting held on November 27, 2019 at the Large Taxpayers Unit (LTU) Karachi which was chaired by FBR Chairman and attended by members of Pakistan Banks Association (PBA).

    The meeting discussed the issued regarding information to be provided by the banks under Section 165A of the Income Tax Ordinance, 2001.

    The chairman emphasized that the Section 165A had been amended on the specific request of the PBA in 2014, 2018, and recently through Supplementary Finance Amendment Act, 2019.

    Therefore, members should have no objection to the withdrawal of petition in the higher courts, the chairman said.

    After detailed deliberations, the meeting decided that the PBA would withdraw their petitions from the higher courts and provide information under Section 165A after mutual consultation with the FBR.

    The participants of the meeting besides FBR chairman Syed Shabbar Zaidi, included Muhammad Aurangzeb, President/CEO, Habib Bank Limited, Chairman, PBA and Imran Maqbool, President/CEO, MCB Bank limited, Vice Chairman, PBA.

    Representatives of banks who are also executive members of PBA were also present at the meeting.

  • FBR auditor awarded dismissal from service for availing NAB plea bargain

    FBR auditor awarded dismissal from service for availing NAB plea bargain

    ISLAMABAD: Federal Board of Revenue (FBR) has imposed major penalty on a senior auditor (BS-18) for making money through corruption and avail plea bargain of National Accountability Bureau (NAB).

    In a notification issued on Friday, the FBR said that Ali Akbar Tunio, Assistant Director (Audit) ( BS-18), Regional Tax Office-II, Karachi had availed the benefits of plea bargain in terms of section 25 (b) of National Accountability Ordinance, 1999 as per Accountability Court-III, Sindh, Karachi judgement dated May 23, 2019.

    The competent authority i.e. Secretary Revenue Division, after examining the case in light of provisions contained in Rule 8 of the Government Servants (Efficiency & Discipline) Rules 1973 has imposed major penalty of “Dismissal from Service” under Rule 4 (1)(b)(iv) with effect from the date of conviction i.e. May 23, 2019.

    In light of the above, major penalty of dismissal from service is imposed upon Ali Akbar Tunio, Assistant Director (Audit) ( BS-18), Regional Tax Office-II, Karachi under Rule 4(1)(b)(iv) of the Government Servants (Efficiency & Discipline) Rules, 1973 with effect from the date of conviction i.e. 23.05.2019.

    Ali Akbar Tunio, Assistant Director (Audit) ( BS-18), Regional Tax Office-II, Karachi shall have a right to file an appeal to Appellate Authority under Civil Servants (Appeal) Rules, 1977 within a period of 30 days from the date of communication.