Pkrevenue.com

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.

  • Tax Year 2021: rate of tax on cash withdrawal from banks

    Tax Year 2021: rate of tax on cash withdrawal from banks

    ISLAMABAD: Federal Board of Revenue (FBR) has updated rate of income tax to be deducted at the time of cash withdrawal from banks during tax year 2021 (July 01, 2020 to June 30, 2021).

    The FBR issued Income Tax Ordinance, 2001 (updated up to June 30, 2020) after incorporating amendments brought through Finance Act, 2020.

    The FBR updated the rate of tax to be deducted under section 231A of Income Tax Ordinance shall be 0.6 percent of the cash amount withdrawn, for the person whose name is not appearing in the active taxpayers’ list.

    The text of Section 231A is as follow:

    231A. Cash withdrawal from a bank.—(1) Every banking company shall deduct tax at the rate specified in Division VI of Part IV of the First Schedule, if the payment for cash withdrawal, or the sum total of the payments for cash withdrawal in a day, exceeds fifty thousand rupees.

    “Explanation.- For removal of doubt, it is clarified that the said fifty thousand rupees shall be aggregate withdrawals from all the bank accounts in a single day.”

    The FBR also updated the rate of tax to be deducted under section 231AA shall be at the rate of 0.6 percent of the transactions for the person whose name is not appearing in the active taxpayers’ list.

    Following is the text of Section 231AA of the Ordinance is:

    231AA. Advance tax on transactions in bank.— (1) Every banking company, non-banking financial institution, exchange company or any authorized dealer of foreign exchange shall collect advance tax at the time of sale against cash of any instrument, including Demand Draft, Pay Order, CDR, STDR, SDR, RTC, or any other instrument of bearer nature or on receipt of cash on cancellation of any of these instruments.

    (2) Every banking company, non-banking financial institution, exchange company or any authorized dealer of foreign exchange shall collect advance tax at the time of transfer of any sum against cash through online transfer, telegraphic transfer, mail transfer or any other mode of electronic transfer.

    (3) The advance tax under this section shall be collected at the rate specified in Division VIA of Part IV of the First Schedule, where the sum total of payments for transactions mentioned in sub-section (1) or sub-section (2) as the case may be, exceed twenty-five thousand rupees in a day.

  • Income tax rates on telephone, internet usage

    Income tax rates on telephone, internet usage

    ISLAMABAD: Federal Board of Revenue (FBR) has updated rates of income tax on usage of telephone and internet services by phone subscribers during tax year 2021 (July 30, 202 to June 30, 2021).

    The FBR issued Income Tax Ordinance, 2001 (updated June 30, 2020) after incorporating amendments brought through Finance Act, 2020.

    The FBR also updated following rates of collection of tax under section 236 of the Income Tax Ordinance, —

    (a)In the case of a telephone subscriber (other than mobile phone subscriber) where the amount of monthly bills exceeds Rs100010 percent of the exceeding amount of bill
    (b)In the case of subscriber of internet, mobile telephone and pre-paid internet or telephone card12.5 percent of the amount of bill or sales price of internet pre-paid card or prepaid telephone card or sale of units through any electronic medium or whatever form.

    Following is the text of Section 236 of Income Tax Ordinance, 2001:

    236. Telephone and internet users.- (1) Advance tax at the rates specified in Part IV of the First Schedule shall be collected on the amount of –

    (a) telephone bill of a subscriber;

    (b) prepaid cards for telephones;

    (c) sale of units through any electronic medium or whatever form; and

    (d) internet bill of a subscriber; and

    (e) prepaid cards for internet.

    (2) The person preparing the telephone or internet bill shall charge advance tax under sub-section (1) in the manner telephone or internet charges are charged.

    (3) The person issuing or selling prepaid cards for telephones or internet shall collect advance tax under sub-section (1) from the purchasers at the time of issuance or sale of cards.

    (3A) The person issuing or selling units through any electronic medium or whatever form shall collect advance tax under sub-section (1) from the purchaser at the time of issuance of sale of units.

    (4) Advance tax under this section shall not be collected from Government, a foreign diplomat, a diplomatic mission in Pakistan, or a person who produces a certificate from the Commissioner that his income during the tax year is exempt from tax.

  • Income tax rates on electricity consumption

    Income tax rates on electricity consumption

    ISLAMABAD: Federal Board of Revenue (FBR) has updated rates of income tax on consumption of electricity for the tax year 2021 (July 01, 2020 to June 30, 2021).

    The FBR issued Income Tax Ordinance, 2001 (updated up to June 30, 2020) after incorporating amendments brought through Finance Act, 2020.

    The FBR updated the following rates of income tax on electricity consumption under Section 235 of the Ordinance:

    Rate of collection of tax under section 235 where the gross amount of electricity bill,

    (a) does not exceed Rs. 400 – the tax rate shall be zero

    (b) exceeds Rs. 400 but does not exceed Rs. 600 – the tax amount shall be Rs. 80

    (c) exceeds Rs. 600 but does not exceed Rs. 800 – the tax amount shall be Rs. 100

    (d) exceeds Rs. 800 but does not exceed Rs. 1000 – the tax amount shall be Rs. 160

    (e) exceeds Rs. 1000 but does not exceed Rs. 1500 – the tax amount shall be Rs. 300

    (f) exceeds Rs. 1500 but does not exceed Rs. 3000 – the tax amount shall be Rs. 350

    (g) exceeds Rs. 3000 but does not exceed Rs. 4500 – the tax amount shall be Rs. 450

    (h) exceeds Rs. 4500 but does not exceed Rs. 6000 – the tax amount shall be Rs. 500

    (i) exceeds Rs. 6000 but does not exceed Rs. 10000 – the tax amount shall be Rs. 650

    (j) exceeds Rs. 10000 but does not exceed Rs. 15000 – the tax amount shall be Rs. 1000

    (k) exceeds Rs. 15000 but does not exceed Rs. 20000 – the tax amount shall be Rs. 1500

    (l) exceeds Rs. 20000 – the tax amount shall be:

    (i) at the rate of 12 percent for commercial consumers;

    (ii) at the rate of 5 per cent for industrial consumers.

    The text of Section 235 is as:

    235. Electricity consumption.- (1) There shall be collected advance tax at the rates specified in Division IV of Part-IV of the First Schedule on the amount of electricity bill of a commercial or industrial consumer.

    (2) The person preparing electricity consumption bill shall charge advance tax under sub-section (1) in the manner electricity consumption charges are charged.

    Explanation.— For removal of doubt, it is clarified that for the purposes of this section electricity consumption bill referred to in sub-section (2) means electricity bill inclusive of sales tax and all incidental charges.

    (3) Advance tax under this section shall not be collected from a person who produces a certificate from the Commissioner that his income during tax year is exempt from tax or that he has discharged advance tax liability for the tax year.

    (4) Under this section, —

    (a) in the case of a taxpayer other than a company, tax collected upto bill amount of three hundred and sixty thousand Rupees per annum shall be treated as minimum tax on the income of such persons and no refund shall be allowed;

    (b) in the case of a taxpayer other than a company, tax collected on monthly bill over and above thirty thousand rupees per month shall be adjustable; and

    (c) in the case of a company, tax collected shall be adjustable against tax liability.

    The FBR also updated rate of tax to be collected from domestic consumers of electricity under Section 235A of the Ordinance:

    The rate of tax to be collected under section 235A shall be—

    (i) 7.5 percent if the amount of monthly bill is Rs. 75,000 or more; and

    (ii) 0 percent the amount of monthly bill is less than Rs. 75,000.

    The text of Section 235A is as follow:

    235A. Domestic electricity consumption.- (1) There shall be collected advance tax at the rates specified in Division XIX of Part IV of the First Schedule on the amount of electricity bill of a domestic consumer.

    Explanation.— For removal of doubt, it is clarified that for the purposes of this section, electricity consumption bill referred to in sub-section (2) means electricity bill inclusive of sales tax and all incidental charges.

    (2) The person preparing electricity consumption bill shall charge advance tax under sub-section (1) in the manner electricity consumption charges are charged.

    (3) Tax collected under this section shall be adjustable against tax liability.

  • Manual tax collection to be eliminated by January: SBP

    Manual tax collection to be eliminated by January: SBP

    KARACHI: The manual collection of taxes will be eliminated by January 2021 and in this regard Federal Board of Revenue (FBR) and State Bank of Pakistan (SBP) have agreed on the timelines.

    The central bank in a report said that the timelines were agreed with FBR to gradually eliminate the manual tax collections by January 2021.

    “As a first step in this direction, the option of manual tax payment by corporate sector was eliminated from August 2020,” the SBP said.

    During 2019/2020, the SBP intensified efforts to digitize government receipts and payments. In order to bring the cost of digital tax payments and manual paper based tax payment, the nominal fee on digital payment of taxes on the tax payers was eliminated which would be absorbed by SBP.

    As the fee is nominal as compared to the agency commission, the SBP pays to agent banks for traditional paper based tax collection, the absorption of digital tax payment fee by SBP, will in fact reduce the net cost of tax collections for SBP.

    Further, in a significant development in this respect, timelines were agreed with FBR to gradually eliminate the manual tax collections by January 2021. As a first step in this direction, the option of manual tax payment by corporate sector was eliminated from August 2020.

    The SBP said that the Alternate Delivery Channels (ADC) system for collection of government taxes is functioning and robustly for different agencies of the federal government and Government of Punjab.

    The taxpayers pay their taxes through internet banking, mobile banking, ATMs and Over-the-Counters (OTC) facility of branches of commercial banks across the country.

    “Since its launch in March 2018, an aggregate amount of Rs.829 billion of government taxes and duties has been collected.”

    In order to promote digital payments of government taxes and duties, SBP with effect from January 1, 2020, eliminated the transaction fee for taxpayers using digital modes for payment of duties and taxes of federal and provincial governments.

    Further, to utilize the potential of ADCs system fully, SBP and FBR have agreed to gradually replace the manual payments of FBR’s taxes with the ADCs system starting with corporate taxpayers from first quarter (July – September) of 2020/2021.

    Accordingly, payments of FBR’s Taxes by AOPs/Partnerships and individuals will be shifted completely on the ADCs in the Second Quarter and Third Quarter of 2020/2021 respectively.

    Similarly, SBP is negotiating with other provincial governments to use this facility for their taxpayers and utilize the umbrella of ADCs for collection of their taxes and levies. Recently, SBP, M/s 1Link and Islamabad Capital Territory Administration (ICTA) have executed a tripartite agreement for extension of ADC system for collection of ICTA taxes and duties.

    While negotiation with Finance Department, Khyber Pakhtunkhwa are at advance stage for initiation of online collections, negotiation with other provincial governments will be initiated in FY21. The project will be broadly based on the model already implemented for FBR and Government of Punjab.

    After digitization and automation of Person to Government (P2G) payments, SBP and GoP are now working on digitization of Government to Person (G2P) payments.

    As a part of G2P digital payments, SBP and Pakistan Customs are working on digitization of Duty Drawbacks refunds to business in the first phase. After digitization of this process, Customs will generate and deliver a message to SBP for payment of refunds directly into the exporter’s bank account upon realization of foreign exchange proceeds of export consignment.

    The successful implementation of this project will be a milestone towards digitization of G2P payments and will help in the government’s initiatives for ease in doing business.

  • Date for filing income tax returns not to be extended: FBR

    Date for filing income tax returns not to be extended: FBR

    ISLAMABAD: Federal Board of Revenue (FBR) on Saturday said that it will not further extend the date for filing income tax return for tax year 2020.

    A FBR spokesman said that the date for filing income tax return has already been extended up to December 08, 2020. “Therefore, no further date will be given beyond the extended timeline,” the spokesman added.

    The last date for filing income tax return for tax year 2020 was September 30, 2020. However, the FBR extended the date up to December 08, 2020.

    The spokesman said that the FBR had taken many measures to facilitate taxpayers. “An easy return form for tax year 2020 has been introduced. Taxpayers now submit their annual returns through wizard bases interface. Further, the returns can be submitted through smart phone application,” the spokesman added.

    The FBR has identified persons having taxable income but those are remained non-compliant in filing their returns. The FBR also identified those persons who have source of earnings but have not declared their true incomes.

    “The details of all such persons are available at the FBR’s database. These persons have been given last chance to declare their true income and assets to avoid legal action,” the spokesman said.

  • Commissioners IR given power to select taxpayers for audit

    Commissioners IR given power to select taxpayers for audit

    ISLAMABAD: Federal Board of Revenue (FBR) has decided to authorize Commissioner Inland Revenue to select cases for audit under relevant provisions of tax laws.

    (more…)
  • FBR notifies promotions of IRS, PCS officers to BS-22

    FBR notifies promotions of IRS, PCS officers to BS-22

    ISLAMABAD: Federal Board of Revenue (FBR) has notified promotions to BS-22 of officers of Inland Revenue Service (IRS) and Pakistan Customs Service (PCS).

    According to a notification issued October 29, 2020, in pursuance of approval of the Competent Authority conveyed vide Establishment Division’s U.O No.7/1/2020-CP-VI, dated 29.10.2020, the following BS-21 officers of IRS are promoted to BS-22 in the same service on regular basis with immediate effect:-

    1) Ms. Seema Shakil

    2) Nadir Mumtaz Warraich

    3) Dr. Muhammad Ali Khan

    The FBR said that the officers appearing at Sr .No. 2 and 3 will actualize their promotion from the date they return from deputation and join FBR.

    Through another notification, the FBR said in pursuance of approval of the Competent Authority conveyed vide Establishment Division’s U.O.No.7/1/2020-CP-VI dated 29.10.2020, the following BS-21 officers of PCS are promoted to BS-22 in the same service with immediate effect and until further orders:-

    (i) Abdul Rashid Sheikh

    (ii) Muhammad Saleem Ahmad Ranjha

    The FBR said that if the officers are drawing Performance Allowance prior to issuance of these notifications, they will continue to draw this allowance on their promotion.

  • Motor vehicle tax rates for Tax Year 2021

    Motor vehicle tax rates for Tax Year 2021

    ISLAMABAD: Federal Board of Revenue (FBR) has updated rate of income tax on motor vehicles used for passenger and goods transportation. The income tax rate shall apply during tax year 2021 (July 01, 2020 to June 30, 2021).

    The FBR issued Income Tax Ordinance, 2001 (Updated up to June 30, 2020) after incorporating amendments brought through Finance Act, 2020.

    The FBR updated rate of income tax on motor vehicles under Section 234 of Income Tax Ordinance, 2001:

    Rates of collection of tax under section 234,—

    (1) In case of goods transport vehicles, tax of two rupees and fifty paisa per kilogram of the laden weight shall be charged.

    (1A) In the case of goods transport vehicles with laden weight of 8120 kilograms or more, advance tax after a period of ten years from the date of first registration of vehicle in Pakistan shall be collected at the rate of twelve hundred rupees per annum;

    (2) In the case of passenger transport vehicles plying for hire with registered seating capacity of—

    S.No.CapacityRs per seat per annum
    (i)Four or more persons but less than ten persons.50
    (ii)Ten or more persons but less than twenty persons.100
    (iii)Twenty persons or more.300

    (3) In case of other private motor vehicles shall be as set out in the following Table, namely:-

    S. No.Engine capacityTax
    (1)(2)(3)
    1.upto 1000ccRs. 800
    2.1001cc to 1199ccRs. 1,500
    3.1200cc to 1299ccRs. 1,750
    4.1300cc to 1499ccRs. 2,500
    5.1500cc to 1599ccRs. 3,750
    6.1600cc to 1999ccRs. 4,500
    7.2000cc & aboveRs. 10,000

    (4) where the motor vehicle tax is collected in lump sum,

    S. No.Engine capacityTax
    (1)(2)(3)
    1.upto 1000ccRs. 10,000
    2.1001cc to 1199ccRs. 18,000
    3.1200cc to 1299ccRs. 20,000
    4.1300cc to 1499ccRs. 30,000
    5.1500cc to 1599ccRs. 45,000
    6.1600cc to 1999ccRs. 60,000
    7.2000cc & aboveRs. 120,000

    Following is Section 234 of Income Tax ordinance, 2001

    Tax on motor vehicles— (1) Any person at the time of collecting motor vehicle tax shall also collect advance tax at the rates specified in Division III of Part IV of the First Schedule.

    (2) If the motor vehicle tax is collected in instalments or lump sum the advance tax may also be collected in instalments or lump sum in like manner.

    (2A) In respect of motor cars used for more than ten years in Pakistan, no advance tax shall be collected after a period of ten years.

    (3) In respect of a passenger transport vehicle with registered seating capacity of ten or more persons, advance tax shall not be collected after a period of ten years from the first day of July of the year of make of the vehicle.

    (4) In respect of a goods transport vehicle with registered laden weight of less than 8120 kilograms, advance tax shall not be collected after a period of ten years from the date of first registration of vehicle in Pakistan.

    (5) Advance tax collected under this section shall be adjustable.

    (6) For the purpose of sub-sections (1) and (2) “motor vehicle” shall include the vehicles specified in sub-section (7) of section 231B.

  • Mobilink terms FBR recovery action as unfortunate

    Mobilink terms FBR recovery action as unfortunate

    ISLAMABAD: A spokesman of Jazz (Mobilink) on Thursday said that the treatment of the Federal Board of Revenue (FBR) for the recovery of disputed amount through sealing the office was unfortunate.

    “Despite being the largest taxpayers, we are treated in an unfortunate way,” a company spokesman said.

    “While the government is making efforts to improve the business environment in the country, such drastic measures would unfortunately severely affect investment prospects,” the spokesman said in a statement.

    “We have received a notice from FBR yesterday for the recovery of a disputed tax demand and we have serious reservations on these alleged taxes.

    “The proceedings were carried out on plea of a tax recovery notice for a disputed amount from 2018 which is under legal proceedings.

    “Due to the drastic measures our corporate reputation and pride has been hurt and shakes the confidence of foreign investors of Jazz and others.

    “Despite being the largest taxpayers, we are treated in an unfortunate way.

    “While the government is making efforts to improve the business environment in the country, such drastic measures would unfortunately severely affect investment prospects,” the spokesman said.

    Jazz seeks resolution of the matter and has always been willing to conduct dialogue as well as rightful legal course to reach merit and right interpretation.

    “Jazz also assures its valued customers that despite the challenges, we will continue to provide uninterrupted services,” the statement said.

    Mobilink is Pakistan’s number one 4G operator and the largest internet and broadband service provider is amongst the largest taxpayers and the biggest foreign investors with an investment of over US$ 9.5 billion during the last 25 years.

    In the last 6 years alone, Jazz has contributed over Rs251 billion to the national exchequer in the form of taxes and duties.

    Jazz has always been a law-abiding corporate citizen and has been in the forefront for contributing to Pakistan’s economy in monetary and development terms, and as the market leader in telecom and internet services with over 63 million customers.

    The company has also discharged its social responsibility in floods, earthquakes, and recently in COVID-19 relief response worth over Rs1.2 billion.

  • FBR delegates powers of appointing authority

    FBR delegates powers of appointing authority

    ISLAMABAD: Federal Board of Revenue (FBR) on Thursday notified authorities for appointment of officials in the revenue board.

    According to the notification Secretary, the Revenue Division shall have power to appoint officials in the posts in basic pay scales 17 to 19 or equivalent.

    Member Admin has been authorized to appoint posts in basic pay scales 16 or equivalent in FBR Headquarter and its field offices.

    Chief (Management) has been authorized to appoint officials in basic pay scales 8 to 15 or equivalent in FBR HQ.

    Chief Admin has been authorized to appoint officials in post of basic pay scales 1 to 7 or equivalent in FBR HQ.

    For appointing in posts in BS-1 to 15 of field offices of the FBR, the appointing authorities are chief commissioner in BS-20/21, Director General (BS-21), Chief Collectors (BS-21), Collectors (BS-20).