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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 issues draft rules for movement of international transshipment cargo

    FBR issues draft rules for movement of international transshipment cargo

    ISLAMABAD: Federal Board of Revenue (FBR) on Monday issued draft rules for the movement of international transshipment cargo through any sea port in Pakistan.

    The FBR issued SRO 1538(I)/2019 for introducing draft rules and asked stakeholders to provide their comments within 15 days to finalize the rules.

    Following are the rules to be inserted in the Customs Rules 2001:

    Rule 510A: Transshipment of imported cargo from gateway port to a foreign port

    The following procedure is prescribed for the movement of the International Transshipment (IT) cargo through any sea port in Pakistan, which shall be distinctly manifested as such in the IGM/carrier declaration uploaded electronically in the Customs Computerized System by the shipping line or its agent. Such manifest shall necessarily include the following information, namely:

    (a) port of loading

    (b) via port (name of the transshipment port of Pakistan)

    (c) port of destination (final port of discharge at foreign destination)

    (d) bill of lading (B/L) No

    (e) name of foreign exporter, and

    (f) name of foreign importer.

    510B: Transshipment of containerized cargo

    The unloading of IT containers of the transshipment of containerized cargo shall,-

    (a) mode in presence of Preventive Officer and after unloading. IT containers shall be stored separately at a place earmarked for them in the notified premises of a seaport.

    (b) the Preventive Officer shall examine the shipper seals of the IT containers and in case of any broken seal, such container shall be examined and immediately released with the Customs seal in the presence of the custodian and same shall be recorded.

    (c) the cargo so unloaded from one vessel for storage for subsequent loading at another vessel shall not be allowed under any circumstances to be taken out of the bonded area. The terminal operator shall b e responsible for safe storage and security of the goods. In case of any pilferage, shortage, theft or damage to goods, the terminal operator shall be liable to make payment of duty and taxes leviable thereon and compensate the owner of goods.

    (d) for loading of stored international destined cargo, master of the vessel or his authorized agent, or Non-Vessel Operating Common Carrier (NVOCC) shall electronically file an online declaration in Pakistan Customs Computerized System for International Transshipment (IT) against respective VIR/IGM and index to be loaded on a vessel for transportation to an international destination.

    (e) this online declaration shall indicate complete details of the consignment and shall be filed with invoice, packing list, bill of lading and any other requirement document.

    (f) no goods for international transshipment shall be loaded on a vessel until the system has allowed loading electronically. The computerized system may on the basis of Risk Management System (RMS) assign such online declaration to the assessing officers for documentary and physical inspection.

    (g) International transshipment of cargo shall be effected within thirty days of inward berthing of vessel.

    (h) if there is a reason to believe that the goods in violation of any prohibition or restriction have been brought for international transshipment, the same shall be examined and auctioned after the approval of the collector of customs, and

    (i) after online allow of loading, goods shall be allowed to be loaded on to the ship under the Customs supervision. The preventive officer supervising the loading shall acknowledge the loading of such cargo. This record shall be reconciled with the copy of Export General Manifest.

    510C. Transshipment of oversized, bulk and break bulk cargo

    (1) Oversized, bulk and break-bulk cargo shall be examined by the Customs upon discharge and examination report along with the pictures of the cargo shall be uploaded in the Customs Computerized system against B/L. Upon filing of online declaration for transshipment, the details of the cargo shall be reconciled with the imported cargo.

    (2) Partial transshipment of bulk or break bulk cargo shall be allowed against Online Bulk Transshipment Declaration having endorsement ‘partial transshipment’ containing details of total cargo arrived, quantity being transshipped and remaining quantity. The shipping line or its representative shall furnish a complete accountal of bulk or break cargo to the Assistant Collector (Import Section) within twenty four hours of the completion of transshipment. In case of liquid bulk cargo, the same shall be stored in the storage tank used exclusively for the international transshipment.

    510D: Financial guarantee on transshipment goods

    (1) The international transshipment goods shall not be subject to payment of import or export duties and taxes provided the activities are in conformity with these rules.

    (2) Shipping line intending to use the facility of International Transshipment shall furnish a financial guarantee for the leviable duty and taxes of the goods as security to ensure exit of goods outside the country within thirty days from the berthing of inward vessel. The financial guarantee shall be forfeited apart from the other consequential penal action under the Customs Act, 1969 and the rules made there under, if the shipping line misuse the facilities of international transshipment.

    (3) If a request for transshipment is not filed for the goods stored for transshipment within thirty days of its arrival, a notice shall be sent to the shipping line or its agent on the address given in the shipping documents for transshipment of goods from the port. If goods still remain on the port after expiry of sixty days of their arrival, the goods shall then be auctioned and unless the delay is attributable to the port authorities.

    513E: Execution of Bond by Shipping Line

    Shipping line shall execute a bond for ensuing to follow Customs Rules and regulations and for immediate removal of the goods from port in case the same is required by an officer not below the rank of Collector of Customs. The collector of customs, after recording the reason of such direction in writing, shall require the shipping line of immediate removal of transshipment cargo.

    510F: Prohibition and Restrictions

    The facility for international transshipment shall not be available to cargo containing arms and ammunition, explosive, radioactive materials, goods and technologies relating to Nuclear and Biological Weapons and restricted commodities under the UNSCC sanctions.

  • Banks to provide details of persons receiving profit on debt

    Banks to provide details of persons receiving profit on debt

    ISLAMABAD: Banks will provide certain information of persons receiving profits on their deposits to the Federal Board of Revenue (FBR) after amendment in the tax rules, sources said on Monday.

    The sources said that the banks will provide details of depositors receiving profit on debt, including name, CNIC, most recent particulars including address, amount of profit on debt during the year, tax deducted etc.

    The banks are required to provide information of persons receiving profit on debt exceeding Rs500,000 during the financial year.

    According to the FBR, every banking company officer, shall file electronically on FBR’s web portal the Account Holders Deposits Statement and Credit Card Payments Statement and Cash Withdrawal Statement as specified in Form „A‟ and Form ‘B’ respectively, for immediately preceding calendar biannually.

    Every banking company officer shall furnish to the Board an annual Written off Loans Statement as specified in Form „C’ for immediately preceding calendar year within three months of the end of the preceding calendar year.

    Every banking company officer, shall furnish to the Board a copy of each currency transactions report and suspicious transactions report generated by it at the time it is submitted to the Financial Monitoring Unit under the Anti-Money Laundering Act, 2010 (VII of 2010).

    Every banking company officer, shall furnish to the Board any information and documents in addition to those mentioned in sub-rules (1) to (3) within the time allowed by the Board.

  • FBR sets up special assessment circle for builders, developers

    FBR sets up special assessment circle for builders, developers

    KARACHI: Federal Board of Revenue (FBR) has launched monitoring of sale and purchase in real estate sector by establishing dedicated zone for assessing developers and builders.

    Sources in the FBR said that cases of builders and developers had been transferred to special circular established at Large Taxpayers Unit (LTU)-II, Karachi.

    According to an official order made available to PkRevenue.com all the cases of tax offices in Sindh and Balochistan had been transferred to the newly established circle.

    The sources said that the developers and builders were enjoying the final tax regime for the past several years.

    However, through Finance Act, 2017 the taxation of such segments of taxpayers brought under documented economy.

    These taxpayers will now require filing true declarations and also providing details of transactions made with their clients.

    The special circle will conduct detailed audit of those taxpayers besides obtaining details of buyers.

    According to the official order, the special circular for builders and developers established at the LTU-II Karachi would have jurisdiction over those cases which were earlier with the LTU Karachi, Corporate Regional Tax Office (CRTO) Karachi, RTO-II Karachi, RTO-III Karachi, RTO Hyderabad, RTO Sukkur, RTO Quetta and all cases of builders and developers presently assessed in LTU-II Karachi.

    The FBR also notified setting up special circles at Islamabad and Lahore. The Islamabad circle will have jurisdiction over cases in Islamabad, Abbotabad, Peshawar, Rawalpind, Faisalabad, Gujranwala, Sargodha and Sialkot.

    Further, the Lahore circle shall have jurisdiction over cases in LTU Lahore, CRTO Lahore, RTO-II Lahore, RTOs in Multan, Sahiwal and Bhawalpur.

  • FBR to issue procedure to document non-duty paid fast moving consumer goods

    FBR to issue procedure to document non-duty paid fast moving consumer goods

    ISLAMABAD: Federal Board of Revenue (FBR) will issue procedure for documenting smuggled and non-duty paid fast moving consumer goods (FMCG).

    In a tweet message on Saturday, FBR Chairman Syed Shabbar Zaidi said that the FBR was working in developing a ‘expeditious settlement’ of ‘non duty paid’ fast moving consumer goods available in the market.

    He said that the tax machinery would release details next week.

    “The purpose is to facilitate businessmen and improve documentation without disturbing business confidence,” he added.

    Recently, teams constituted by the FBR conducted physical survey of main markets and shopping centers/plazas to identify the presence of non-duty paid and smuggled goods.

    The FBR teams inspected imported products including garments, cosmetics, watches, toys, gift items, batteries, cigar, leather goods, designer bags etc.

    The sources said that the teams had identified smuggled and non-duty paid goods at big retails outlets.

    The FBR on August 17, 2019 decided to launch monitoring the presence of smuggled goods in main shopping markets across the country from this month. It was also decided to launch the monitoring by joint teams of Inland Revenue and Pakistan Customs.

    The Overseas Investors Chamber of Commerce and Industry (OICCI) recently in a letter to the FBR chairman the chairman highlighted the magnitude of smuggled/illegal goods.

    “There is not a single study to identify the complete magnitude of illegal trade in Pakistan but it is estimated that approximately 60 percent of the total demand for products of over half a dozen sectors of the formal economy, including petroleum, tea, mobile phones and auto parts industry, is met only through smuggling.”

    It said that bulk quantity of illegal/smuggled goods is available and these goods were mainly affecting sectors including petroleum, tea, mobile phones and auto parts industry.

    Highlighting the impact of illegal trade, the OICCI said: “virtually all major organized crime groups are not involved in the trade, resulting from huge profits but little risk, and whilst utilizing the services of children and slave labor.”

    These groups do not pay taxes, nor do they pay fair wages, and there is zero traceability of funds generated from the trade and their eventual disposition, the OICCI said, added: “More often than not, these funds may be redirected to terrorism, and money laundering.”

  • Draft law for collecting income tax from small shopkeepers

    Draft law for collecting income tax from small shopkeepers

    ISLAMABAD: Federal Board of Revenue (FBR) has drafted special procedure for collection of income tax from small shopkeepers.

    FBR sources said that an agreed mechanism between the FBR and small traders would be implemented from next week.

    They said that it would be another big achievement of the tax agency after convincing the banks for sharing information of account holders.

    The share of retailers in income tax collection is very low when compared with their contribution towards the national GDP.

    The sources said that on October 30, 2019 the agreement was finalized between the FBR and small traders for the collection of income tax and also to remove procedural glitches.

    According to draft law the small shopkeeper means an individual where the business is carried out at a premises having covered area less than 300 square feet.

    The small business owners will not include in the definition of small shopkeeper if he is engaged in the activity of a jeweler, wholesale, warehouse, real estate agent, builder and developer, doctor, lawyer, chartered accountant or any other category specified by the Board, a retailer operating as a unit of a national or international chain of stores, a retailer operating in an air-conditioned shopping mall, plaza or center, a retailer who has a credit or debit card machine, any person whose cumulative electricity bill exceeds Rs300,000 in the immediately preceding twelve months; and any person covered under section 99C of the Income Tax Ordinance, 2001.

    As per the draft law the small shopkeepers will be liable to pay income tax biannually.

    The FBR will not conduct examination and audit of small shopkeepers. Further, shopkeepers will also not liable to collect withholding tax.

    The sources said that the rate of tax likely be notified next week. They said whatever tax rate is agreed the tax payment will be increased by Rs5,000 annually.

    The FBR will also notify simple income tax return form for small shopkeepers, which will be filed for tax year 2019 onwards.

  • Immovable property purchase above Rs5 million not allowed other than banking channel

    Immovable property purchase above Rs5 million not allowed other than banking channel

    KARACHI: Any immovable property purchased through cash or bearer instruments will liable to penalty of five percent of the total value of immovable property, sources in Federal Board of Revenue (FBR) said on Saturday.

    The sources said that a restriction had been imposed on the purchase of immovable property over Rs5 million through cash or bearer cheque.

    They said that any person who purchases immovable property having fair market value greater than rupees five million through cash or bearer cheque then such person shall pay a penalty of five percent of the value of property determined by the FBR under sub-section (4) of section 68 or by the provincial authority for the purpose of stamp duty, whichever is higher.

    The sources said that through Finance Act 2019 a Section 75A was inserted to Income Tax Ordinance, 2001, under which purchases of assets had been mandatory through banking channels.

    According to the section, no person shall purchase:

    (a) immovable property having fair market value greater than five million Rupees; or

    (b) any other asset having fair market value more than one million Rupees,

    otherwise than by a crossed cheque drawn on a bank or through crossed demand draft or crossed pay order or any other crossed banking instrument showing transfer of amount from one bank account to another bank account.

    For the purposes of this section in case of immovable property, fair market value means value notified by the Board under sub-section (4) of section 68 or value fixed by the provincial authority for the purposes of stamp duty, whichever is higher.

    In case the transaction is not undertaken:

    (a) such asset shall not be eligible for any allowance under sections 22, 23, 24 and 25 of this Ordinance; and

    (b) such amount shall not be treated as cost in terms of section 76 of this Ordinance for computation of any gain on sale of such asset.

  • Taxpayers should file true declarations to avoid 100 percent penalty

    Taxpayers should file true declarations to avoid 100 percent penalty

    KARACHI: The tax laws have explained that any false or misleading statement will liable to penalty of 100 percent of the amount of tax short paid.

    Officials at the Federal Board of Revenue (FBR) said that taxpayers should ensure correct and true entries in their income tax returns and wealth statement while filing their income tax returns for tax year 2019.

    The last date for filing income tax returns for tax year 2019 is December 16, 2019.

    According to Income Tax Ordinance, 2001, any person who –

    (a) makes a false or misleading statement to an Inland Revenue Authority either in writing or orally or electronically including a statement in an application, certificate, declaration, notification, return, objection or other document including books of accounts made, prepared, given, filed or furnished under this Ordinance;

    (b) furnishes or files a false or misleading information or document or statement to an Income Tax Authority either in writing or orally or electronically;

    (c) omits from a statement made or information furnished to an Income Tax Authority any matter or thing without which the statement or the information is false or misleading in a material particular.

    Such person shall pay a penalty of twenty five thousand rupees or 100 percent of the amount of tax shortfall whichever is higher:

    Provided that in case of an assessment order deemed under section 120, no penalty shall be imposed to the extent of the tax shortfall occurring as a result of the taxpayer taking a reasonably arguable position on the application of this Ordinance to the taxpayers’ position.

  • FTO committee expresses distress over tax recovery from bank accounts

    FTO committee expresses distress over tax recovery from bank accounts

    ISLAMABAD: The advisory committee of the Federal Tax Ombudsman (FTO) has expressed distress over attachment of bank accounts and coercive recovery by Federal Board of Revenue (FBR) from bank accounts of taxpayers.

    A meeting of the advisory committee of the FTO was held recently and discussed various issues related to refunds and coercive recovery of the FBR from bank accounts of taxpayers, according to the FTO new letter issued last month.

    The committee expressed great distress about the attachment of bank accounts and coercive recoveries. The participants suggested that attachment of accounts may be affected only after Tribunal’s decision.

    On the issue of refunds, the participants observed following:

    Delayed refund is a serious issue which continuously poses challenge to the survival of business community.

    Refund amount should be paid after two stages of appeals in favor of taxpayer, even if department then goes to reference before the higher court.

    An online system for tracking of refund by claimants should be put in place by FBR.

    A system of adjustment of refund in the next return should be devised to get rid of the chronic issue of delayed refund.

    Even after verification of claim, cheques are not issued in time.

    The refund payment system ought to be dovetailed with magnitude of amount as 70-75 percent of refunds fall in the category of up to Rs100,000 only and need automated settlement.

    Compensation for delayed refunds should be ensured as delayed has its own cost.

    Regarding assessment by the tax officials, the FTO advisory committee observed following:

    Arbitrary, coercive and malafide assessment is the root cause of all subsequent tax maladministration and victimization of business community.

    There is no accountability on arbitrary, coercive and malafide assessment.

    There should be some check on the quality of assessment made by an assessing officer.

    At times undated orders are issued.

  • FBR notifies transfers, postings of BS-20 IRS officers

    FBR notifies transfers, postings of BS-20 IRS officers

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday notified transfers and postings of BS-20 officers of Inland Revenue Service (IRS) with immediate effect until further orders.

    The FBR notified transfers and postings of following officers:

    01. Muhammad Farrukh Majid (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue Inland Revenue (Appeals-V), Lahore from the post of Commissioner, (HRM) Corporate Regional Tax Office, Lahore.

    02. Ms. Irum Sarwar (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Appeals-VI), Lahore from the post of Commissioner, (HRM) Large Taxpayers Unit, Lahore.

    03. Ms. Ayesha Imran Butt (Inland Revenue Service/BS-20) has been transferred and posted as Commissioner Inland Revenue (Appeals-VII), Lahore from the post of Commissioner, (IP/TFD/HRM) Regional Tax Office II, Lahore.

    The FBR said that the officers who are drawing performance allowance prior to issuance of this notification shall continue to draw this allowance on the new place of posting.

  • FBR announces implementation of agreement with traders from next week

    FBR announces implementation of agreement with traders from next week

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday announced implementation of agreement with traders from next week.

    FBR chairman Syed Shabbar Zaidi in a tweet message said that committees represented by the traders of each area/ market, covering the whole country will be notified.

    “Traders and FBR will work together for registration,” the chairman said and termed it a new beginning for taxation history of Pakistan.

    The FBR and trade community were at odd on the implementation of some of initiatives for documentation of economy, especially the introduction of CNIC.

    However, on October 30, 2019 an agreement was signed between FBR and traders.

    Following is the 11-point agreement between the tax authorities and traders associations:

    01. The tax rate shall be lowered to 0.5 percent from 1.5 percent for traders having turnover up to Rs100 million.

    02. No liability on a trader having up to Rs100 million to collect / deposit withholding tax on transactions.

    03. Threshold of annual electricity bill of Rs600,000 for mandatory sales tax registration has been increased to Rs1.2 million.

    04. Turnover tax for sectors having lower returns will be revisted with consultation with traders associations.

    05. Tax issues of jewelers will be resolved in consultation with jewelers associations.

    06. The renewal license fees on middlemen will be revisited.

    07. To resolve traders taxation issues a desk at FBR headquarters will be set up with immediate effect. A BS-20/21 officer will be designated to resolve the traders’ problems.

    08. For new registration of traders a simple income tax return form in Urdu Language will be introduced. Trade associations will cooperation in FBR’s registration drive.

    09. Which trader will be exempted from registration having 1000 square feet shop will be decided by traders committees.

    10. The registration of those retailers engaged in wholesale business will be decided in consultation with traders community.

    11. The FBR will take no action on sales transactions without CNIC information till January 31, 2020.