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 salary tax card for Tax Year 2020

KARACHI: Federal Board of Revenue (FBR) has issued salary tax card for tax year 2020 after incorporating changes brought through Finance Act, 2019 to Income Tax Ordinance, 2001.

The FBR issued Income Tax Ordinance, 2001 updated till June 30, 2019 under which tax rates for salary persons would be applicable from July 01, 2019 to June 30, 2020

The FBR said that there the income of an individual chargeable under the head “salary” exceeds seventy-five per cent of his taxable income, the rates of tax to be applied shall be as set out in the following table, namely:

S. No.	Taxable income	Rate of tax
(1)	(2)	(3)
1.	Where taxable income does not exceed Rs. 600,000	0%
2.	Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000	5% of the amount exceeding Rs. 600,000
3.	Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 1,800,000	Rs. 30,000 plus 10% of the amount exceeding Rs. 1,200,000
4.	Where taxable income exceeds Rs. 1,800,000 but does not exceed Rs. 2,500,000	Rs. 90,000 plus 15% of the amount exceeding Rs. 1,800,000
5.	Where taxable income exceeds Rs.2,500,000 but does not exceed Rs. 3,500,000	Rs. 195,000 plus 17.5% of the amount exceeding Rs. 2,500,000
6.	Where taxable income exceeds Rs. 3,500,000 but does not exceed Rs. 5,000,000	Rs. 370,000 plus 20% of the amount exceeding Rs. 3,500,000
7.	Where taxable income exceeds Rs. 5,000,000 but does not exceeds Rs. 8,000,000	Rs. 670,000 plus 22.5% of the amount exceeding Rs. 5,000,000
8.	Where taxable income exceeds Rs. 8,000,000 but does not exceeds Rs. 12,000,000	Rs. 1,345,000 plus 25% of the amount exceeding Rs. 8,000,000
9.	Where taxable income exceeds Rs. 12,000,000 but does not exceeds Rs. 30,000,000	Rs. 2,345,000 plus 27.5% of the amount exceeding Rs. 12,000,000
10.	Where taxable income exceeds Rs. 30,000,000 but does not exceeds Rs. 50,000,000	Rs. 7,295,000 plus 30% of the amount exceeding Rs. 30,000,000
11.	Where taxable income exceeds Rs. 50,000,000 but does not exceeds Rs. 75,000,000	Rs. 13,295,000 plus 32.5% of the amount exceeding Rs. 50,000,000
12.	Where taxable income exceeds Rs. 75,000,000	Rs. 21,420,000 plus 35% of the amount exceeding Rs. 75,000,000]

October 6, 2019

FBR to implement real-time sales invoicing system from November 01

KARACHI: Federal Board of Revenue (FBR) has decided to implement online invoice system with shopping store chains across the country from November 01, 2019.

The point of sale invoicing system is an online real-time system for documentation of sales tax connects the computerized sales system for large retail stores i.e. Tier-1 retailers to FBR’s system through internet.

According to FBR the Tier-1 retailers are:

(a) a retailer operating as a unit of a national or international chain of stores;

(b) a retailer operating in an air-conditioned shopping mall, plaza or centre, excluding kiosks;

(c) a retailer whose cumulative electricity bill during the immediately preceding twelve consecutive months exceeds Rupees six hundred thousand; 8[ ]

(d) a wholesaler-cum-retailer, engaged in bulk import and supply of consumer goods on wholesale basis to the retailers as well as on retail basis to the general body of the consumers”; and
(e) a retailer, whose shop measures one thousand square feet in area or more.”;

The FBR said that retailers do not need to purchase any new machines to get linked with this system. “They can get linked by simply downloading an application in their existing machines,” the FBR said.

The revenue body further said that a barcode or QR code automatically gets printed on the invoice generated through a sale by the retailer.

Customers can verify the sales tax payment through the Tax Asaan Application.

The FBR further said that the system helps retailers in automatic preparation of sales tax returns and thereby reducing their expenditure.

The revenue body said that adopting the POS Invoicing System will end periodic inspections by FBR officials. The FBR further said that the system had been running successfully for over a year at 3,824 outlets of 70 famous top textile and leather brands.

The FBR said that from November 01, 2019 the system will be implemented for restaurants in Islamabad and all shopping store chains across the country.

October 6, 2019
FBR explains salary tax to be chargeable for Tax Year 2020

KARACHI: Federal Board of Revenue (FBR) has explained the treatment of salary tax to be applicable during Tax Year 2020.

The FBR issued Income Tax Ordinance, 2001 updated till June 30, 2019 and explained the taxability on salary received by an employee.

Under Section 12 of the Income Tax Ordinance, 2001 the salary chargeable to tax as:

Section 12: Salary

Sub-Section (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”.

Sub-Section (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.

Sub-Section (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.

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

Sub-Section (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.

Sub-Section (6): An employee who has received an amount referred to in sub-clause (iii) of clause (e) of sub-section (2) in a tax year may, by notice in writing to the Commissioner, elect for the amount to be taxed at the rate computed in accordance with the following formula, namely: —

A/B%

where —

A is the total tax paid or payable by the employee on the employee’s total taxable income for the three preceding tax years; and

B is the employee’s total taxable income for the three preceding tax years.

Sub-Section (7): Where —

(a) any amount chargeable under the head “Salary” is paid to an employee in arrears; and

(b) as a result the employee is chargeable at higher rates of tax than would have been applicable if the amount had been paid to the employee in the tax year in which the services were rendered, the employee may, by notice in writing to the Commissioner, elect for the amount to be taxed at the rates of tax that would have been applicable if the salary had been paid to the employee in the tax year in which the services were rendered.

Sub –Section (8) An election under sub-section (6) or (7) shall be made by the due date for furnishing the employee’s return of income or employer certificate, as the case may be, for the tax year in which the amount was received or by such later date as the Commissioner may allow.

October 5, 2019
FBR notifies major reshuffle in Pakistan Customs Service; 35 officers transferred

ISLAMABAD: Federal Board of Revenue (FBR) on Friday in a major reshuffle transferred and posted 35 officers of Pakistan Customs Service (PCS) from BS-17 to BS-21 with immediate effect and until further orders.
(more…)

October 5, 2019
FBR warns sellers against using CNICs of employees to fulfill condition

ISLAMABAD: Federal Board of Revenue (FBR) has warned sellers against using CNIC/NTN of their employees to fulfill condition in case supplies made to unregistered persons.

The FBR on Friday issued Sales Tax General Order (STGO) No. 106/2019 regarding definition / rules for CNIC/ good faith for sales tax.

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 of being heard.

October 4, 2019
FBR imposes major penalty on senior auditor for obtaining nationality of another country

ISLAMABAD: Federal Board of Revenue (FBR) has imposed major penalty of ‘compulsory retirement’ upon a senior auditor for obtaining citizenship of another country and for visiting abroad by concealing facts of his government job.

The FBR on Friday said that the inquiry proceedings were initiated against Tahir Gul, Senior Auditor (BS-16), RTO Islamabad on the directions of the Federal Services Tribunal (FST); by issuance of Charge Sheet and Statement of allegations by the Authorized Officer i .e. Chief Commissioner, Regional Tax Office, Islamabad.

Mussaratullah Khan, Additional Commissioner, RTO Islamabad was appointed as the Inquiry Officer. The Inquiry Officer submitted Inquiry report dated 02.08.2019, on the basis of which the Authorized Officer recommended to the Authority for imposition of Major Penalty of “Dismissal from Service” under Rule 4(1)(b)(iv) of the Government Servants (Efficiency & Discipline), Rules 1973.

The Authority i.e. Member (Admn) FBR, after considering the facts of the case, available record, recommendations of the Authorized Officer and verbal submissions of the Accused Officer during the personal hearing conducted on 26.09.2019; has been imposed Major Penalty of “Compulsory Retirement” upon Tahir Gul, Senior Auditor (BS-16), Regional Tax Office, Islamabad under rule 4(1)(b)(ii) of the Government Servants (Efficiency & Discipline) Rules, 1973 with immediate effect.

The period of his absence since initial order of Removal from Service on 04.11.2011 till his reinstatement on the direction of FST with immediate effect, on 06.05.2019; shall be treated as Leave without pay and allowance.

Mussaratullah Khan was awarded ‘removal from service’ through a notification on November 04, 2011, on the basis of following facts established against the official:

i) He obtained Passport on mis-representation of facts showing him as an ordinary citizen and not a civil servant.

ii) Proceeded abroad without approval of the competent authority/authorized leave.

iii) Obtained citizenship of another country without permission of the Government.

iv) He furnished bogus medical certificate.

October 4, 2019
FBR issues computation of taxable income for tax year 2020

KARACHI: Federal Board of Revenue (FBR) has issued computation of taxable income for the tax year 2020 (July 01, 2019 to June 30, 2020).

The FBR issued Income Tax Ordinance, 2001 updated till June 30, 2019 under which the computation of taxable income for tax year 2020 has also been updated.

According to Section 09 of the Ordinance, the taxable income of a person for a tax year shall be the total income under clause (a) of section 10 of the person for the year reduced (but not below zero) by the total of any deductible allowances under Part IX of this Chapter of the person for the year.

Section 10: Total Income

The total income of a person for a tax year shall be the sum of the –

(a) person’s income under all heads of income for the year; and

(b) person’s income exempt from tax under any of the provisions of this Ordinance.

Section 11: Heads of income

(1) For the purposes of the imposition of tax and the computation of total income, all income shall be classified under the following heads, namely: —

(a) Salary;

(b) Income from Property;

(c) Income from Business;

(d) Capital Gains; and

(e) Income from Other Sources.

(2) Subject to this Ordinance, the income of a person under a head of income for a tax year shall be the total of the amounts derived by the person in that year that are chargeable to tax under the head as reduced by the total deductions, if any, allowed under this Ordinance to the person for the year under that head.

(3) Subject to this Ordinance, where the total deductions allowed under this Ordinance to a person for a tax year under a head of income exceed the total of the amounts derived by the person in that year that are chargeable to tax under that head, the person shall be treated as sustaining a loss for that head for that year of an amount equal to the excess.

(4) A loss for a head of income for a tax year shall be dealt with in accordance with Part VIII of this Chapter.

(5) The income of a resident person under a head of income shall be computed by taking into account amounts that are Pakistan-source income and amounts that are foreign-source income.

(6) The income of a non-resident person under a head of income shall be computed by taking into account only amounts that are Pakistan-source income.

October 4, 2019
FBR promotes 75 data entry operators to MIS officers

ISLAMABAD: Federal Board of Revenue (FBR) on Thursday promoted 75 Data Entry Operator (DEOs) BS-12 to the post of Management of Information System (MIS) Officer BS-16 on regular basis with immediate effect and until further orders.

The FBR has promoted top 75 senior DEOs, who were waiting for their promotions for a long time.

Following is the list of promoted DEOs to the post of MIS Officers:

Name and place of posting

01. Abdul Hamid Khan, Large Taxpayers Unit (LTU), Lahore

02. Muhammad Amin S/o Bashir Ahmad, Data Processing Center (DPC) Income Tax, Lahore.

03. Aslam Javed Butt, DPC, Income Tax, Karachi.

04. Muhammad Ismail S/o Ghulam Gilani, DPC, Income Tax, Karachi.

05. Syed Junaid Saeed, DPC, Income Tax, Karachi.

06. Tahir Hussain Khan, DPC, Income Tax, Karachi.

07. Syed Tariq Ali, DPC, Income Tax, Rawalpindi.

08. Khalid Mehmood Awan, DPC, Income Tax, Rawalpindi

09. Tahir Ali, DPC, Income Tax, Karachi.

10. Sabir Hussain Lashari, Regional Tax Office (RTO) Hyderabad.

11. Raheela Baloch, RTO Hyderabad.

12. Muhammad Iqbal S/o Muhammad Ishaq (late) DPC, Income Tax, Karachi.

13. Idrees Ahmed, DPC, Income Tax, Lahore.

14. Parvez H Rizvi, DPC, Income Tax, Karachi.

15. Kamal Haider, DPC, Income Tax, Karachi.

16. S. Shafaat Hussain Naqvi, DPC, Income Tax, Multan.

17. Muhammad Mashkoor Khan, LTU Karachi.

18. S. M. Sharique, DPC, Income Tax, Karachi.

19. Kafil Ahmed Jamali, DPC, Income Tax, Karachi.

20. Shagufta Naz, Chief Coordinator Computer Wing, Income Tax, Islamabad.

21. Farida Essa, Directorate of Internal Audit (Inland Revenue), Islamabad.

22. Kauser Parveen, DPC, Income Tax, Karachi.

23. Muhammad Saleem, DPC, Income Tax, Karachi.

24. Mansoor Ahmed, DPC, Income Tax, Karachi.

25. Nadeem Yousuf Zai, DPC, Income Tax, Karachi.

26. Shahzad Saleem, RTO-II, Karachi.

27. Iffat Irfani, DPC, Income Tax, Karachi.

28. Nasir Khan Baloch, DPC, Income Tax, Karachi.

29. Muhammad Saeed Hussain Shah, DPC, Income Tax, Rawalpindi.

30. Riaz Ahmed, DPC, Income Tax, Rawalpindi.

31. Muhammad Iqbal, RTO, Faisalabad.

32. Saqib Ahmed Siddiqui, DPC, Income Tax, Peshawar.

33. Zafar Iqbal, DPC, Income Tax, Peshawar.

34. Ashraf Sohaib, RTO-II, Karachi.

35. Raheela Hakim, DPC, Income Tax, Karachi.

36. Shabbir Hussain, RTO, Faisalabad.

37. Saeed Tahir, DPC, Income Tax, Rawalpindi.

38. Muhammad Aslam, DPC, Income Tax, Rawalpindi.

39. Muhammad Rashid Bhatti, RTO-II Lahore.

40. Nadeem Ul Hasan, Directorate of Intelligence and Investigation, Inland Revenue, Karachi.

41. Malik Saeed Ahmed, DPC, Income Tax, Multan.

42. Ghulam Ali Malik, FBR Headquarter, Islamabad.

43. Imran Ahmed Khan, RTO-II, Lahore.

44. Shahid Iqbal, DPC, Income Tax, Multan.

45. Saifullah Bughio, RTO Hyderabad.

46. Abdul Aziz, LTU Karachi.

47. Muhammad Arif Mushtaq, LTU Karachi.

48. Azmatullah, RTO-II Karachi.

49. Syed Musheeruddin, LTU Karachi.

50. Mukhtar Jagirani, LTU Karachi.

51. Farrukh Saeed, DPC, Income Tax, Karachi.

52. Obaidullah Naeem, DPC, Income Tax, Karachi.

53. Muhammad Zahid S/o Hamid Ahmed Usmani, RTO Quetta.

54. Irfan Sabir, RTO Quetta.

55. Zafar Hassain, LTU Karachi.

56. Saleem Siddiqui, DPC, Income Tax, Karachi.

57. Syed Yousuf, LTU Karachi.

58. Malik Nasar Javed, DPC, Income Tax, Karachi.

59. Shabana Talat Siddiqui, RTO-III, Karachi.

60. Wajid Hussain, DPC, Income Tax, Karachi.

61. Sahir Farooqui, DPC, Income Tax, Karachi.

62. Noor Hayat Khan, Corporate RTO, Karachi.

63. Sh. M. Ismail S/o Shaikh Muhammad Ramzan, DPC, Income Tax, Karachi.

64. Ayaz Haider, RTO Peshawar.

65. Muhammad Yousuf Khan, LTU-II Karachi.

66. Muhammad Amin, DPC, Income Tax, Rawalpindi.

67. Muhammad Atif khan, DPC, Income Tax, Rawalpindi.

68. Iftikhar Ahmed, DPC, Income Tax, Rawalpindi.

69. Gul Khan, DPC, Income Tax, Rawalpindi.

70. Abdul Rauf Siddiqui, RTO-II, Lahore.

71. Ejaz Ahmed Butt, DPC Income Tax, Rawalpindi.

72. Naveed Mirza, DPC, Income Tax, Lahore.

73. Ghulam Muhammad Toor, DPC, Income Tax, Multan.

74. Asif Hussain, RTO Sialkot.

75. Arshad Mehmood, RTO Rawalpindi

The FBR said that the promoted officers would be on probation for a period of one year, extendable, for a further period not exceeding one year, provided that if no order is issued by the day of following the termination of probationary period, the appointment shall be deemed to be held until further orders.

The officers already drawing performance allowance equal to 100 percent of the basic pay will continue to draw the same on their promotion.

October 3, 2019
Customs official awarded major penalty for corruption, misconduct

ISLAMABAD: Federal Board of Revenue (FBR) has imposed major penalty of ‘compulsory retirement’ upon a BS-16 officials of Pakistan Customs on charges of corruption, misconduct and inefficiency.

According to an official note issued on Thursday the FBR said that disciplinary proceedings under Government Servants (Efficiency & Discipline) Rules, 1973 were initiated against Mansab Shah, Inspector (BS-16), Model Customs Collectorate of Preventive, Lahore on account of “Inefficiency”, “Misconduct” and “Corruption” under E&D, Rules 1973 after placing him under suspension vide notification 25.03.2019.

“On receipt of preliminary fact finding inquiry report, all charges were established.”

A Show Cause Notice dated 27.03.2019 was accordingly issued to him and he was also called for personal hearing by the Authorized Officer / Collector, MCC (Preventive), Lahore on 28.05.2019.

After considering the charges framed in the charge sheet and other available record, the Authorized Officer / Collector, MCC (Preventive), Lahore recommended to the Authority for imposition of major penalty of Compulsory Retirement.

The Member (Admn) FBR being Authority in this case, after having considered all aspects of the case and the recommendations of the Authorized Officer has therefore, imposed the major penalty of “Compulsory Retirement” upon Mansab Shah, Inspector, under rule 4(1)(b)(ii) of the Govt. Servants (Efficiency & Discipline) Rules, 1973 with immediate effect.

The period of suspension of the accused officer w.e.f 25.03.2019 till date will be treated as a leave of kind due as admissible under the rules.

The official shall have right of Appeal as admissible in the Civil Servants (Appeal) Rules, 1977.

October 3, 2019
FBR issues fresh list of sectors allowed input tax adjustment

ISLAMABAD: Federal Board of Revenue (FBR) has issued fresh list of sectors to allow input adjustment by amending the Section 8B of Sales Tax Act, 1990.

The FBR issued SRO 1190(I)/2019 on Thursday in suppression of its previous SRO 647(I)/2007 dated June 27, 2007.

The following sectors have been allowed input adjustment and refunds:

01. Persons registered in electrical energy sector.

02. Oil marketing companies and petroleum refineries.

03. Fertilizers manufacturers.

04. Persons making zero-rated supplies, including exports, provided that value of such supplies exceeds 50 percent of value of all taxable supplies in a tax period.

05. Distributors.

06. Gas distribution companies.

07. Telecommunication services.

08. Pakistan Steel, Bin Qasim, Karachi.

09. Registered persons other than manufacturers, making supplies of items covered under the Third Schedule to the Sales tax Act, 1990, on which sales tax has been paid by the manufacturer or importer on retail price, provided that value of such supplies exceeds 80 percent of value of all taxable supplies in a tax period.

10. Commercial importers where value of import subject to 3 percent value addition as prescribed in Twelfth Schedule to the Act exceeds 50 percent of value of all taxable purchases, including imports, in a tax period.

Through the latest SRO the retailers also importing goods in bulk and operating chain stores have been allowed adjustment of input tax to the extent of 95 percent of the output tax for the tax period and the excess amount shall be carried forward to the next period.

The FBR further said that the first proviso of sub-section (1) and sub-section (2) and (3) of Section 8B of the Sales Tax Act, 1990, shall apply, mutatis mutandis, to the input tax to be adjusted or carried forward as provided in clause (b).

October 3, 2019