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 chairperson to inaugurate International Tax Operations directorate on Feb 22

KARACHI: Ms. Nausheen Amjad, Chairperson, Federal Board of Revenue (FBR) will inaugurate directorate of international tax operations in Karachi on Saturday February 22, 2020.

Member Inland Revenue (IR) and Director General Offshore Taxation will also accompany the FBR chairperson.

Office of the Directorate of International Tax Operation Karachi (Sindh) located at PNSC building.

The directorate of international tax operations has mandate to receive and send information from other jurisdictions under spontaneous, automatic and on demand exchange of information under exchange of information agreements.

The directorate has been authorized to levy and recover tax by passing an assessment order under section I23 (1A) of Income Tax Ordinance, 2001 in case of undeclared off-shore assets and incomes.

It has also been authorized to receive, transmit and exchange country reports to the jurisdictions that are parties to international by country agreements with Pakistan.

Further the FBR has empowered the directorate to conduct transfer pricing audit in cases selected for such audit.

February 21, 2020
Audit cases should be assigned to tax officials on basis of skills

KARACHI: Tax managers have suggested that audit cases should be assigned to tax officials on the basis of skills and experience.

“Cases should be assigned on the basis of skill and experience of the officers as it reduces no change monitoring and enhance productivity,” according to an official document on monitoring of withholding taxes.

If a pre-monitoring analysis is conducted by the officers, they will be in a position to ascertain the true potential of specific cases, sectors and their overall impact on the revenue generating activities of the department.

For this purpose, they should examine:

— nature and extent of business entities;

— past compliance behaviour, tax fraud activities;

— group activities as to compliance of tax laws;

— results of previous monitoring and tax audits by the Income Tax and the Sales Tax departments;

— overall declarations and amended Returns, etc, penalties, refunds and corporate status can give a good guidance for selection or otherwise of a case for detailed monitoring of withholding taxes;

— Past information about surveys and special/sectoral studies can also be helpful;

— Taxpayer’s complete particulars are important for follow-up;

For the sake of transparency, it is always good for the tax department to state the following;

— Scope of the monitoring process;

— Process to be followed by the departmental officers for monitoring of a specific case;

— The taxpayers should be informed as to how they will be contacted;

— How the case is to be discussed and who will represent the department;

— How the record will be examined;

— How to convey the findings of the examination/discussions on the cases to the taxpayers;

— Mechanism for submitting replies by the taxpayers;

— Writing the reports about monitoring; and

— To determine future course of action under the relevant provisions of law in the light of the findings of the report, wherever requiring further action.

February 20, 2020
Regulatory duty on wheat import withdrawn; SRO issued

ISLAMABAD: Federal Board of Revenue (FBR) on Thursday issued notification to withdraw regulatory duty on import of wheat and other wheat products.

The Revenue Division issued SRO 119(I)/2020 dated February 19, 2020 to amend SRO 680(I)/2019 to withdraw regulatory duty on import of wheat.

The government imposed 60 percent regulatory duty on import of wheat, which has been withdrawn through the latest SRO.

February 20, 2020
Income tax return filing hits new peak of 2.8 million

ISLAMABAD: The income tax return filing of tax year 2018 has reached to a new peak at 2.8 million by February 16, 2020, according to latest Active Taxpayers List (ATL) issued by Federal Board of Revenue (FBR).
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February 20, 2020
Tax authorities capture huge cash transactions of dress designers; start assessment

KARACHI: Tax authorities have captured millions of rupees cash transactions by many dress designers. The authorities are now making assessment on the basis of such transactions for imposing income tax for past five years, sources said on Wednesday.

The sources said that the tax authorities had captured the cash transactions while disguising themselves as customers during their visits to those places where mostly wedding dresses were being displayed for sale.

Regional Tax Office (RTO) II, Karachi, a revenue collecting arm of Federal Board of Revenue (FBR), identified such dress designers, who were evading income tax. The office issued notices to explain the reasons of very low amount of tax payment or no payment of tax at all.

The tax office during survey found that there was a sector of marriage dress designers, who charge exorbitant amount for the bridal dress making.

Some of the designer even charge millions for a single dress but when their income tax returns were analyzed it was found that quite a large number of these dress designers are paying very meager amount of tax i.e. their declared income does not commensurate with their receipts.

Some of them are even not on tax roll.

The RTO-II Karachi identified the following dress designers:

01. Shehrnaz

02. Nada Tai

03. Aisha Ahmed

04. Wardha Saleem

05. Sanam Chaudhri

06. Sania Maskatiya

07. Cartes by Pasho

08. Silhouettes by Ash & Uzma

09. Nida Azwer

10. Waqar J. Khan

11. Kavalier Laser Cut Innovations

12. Rozina Munib

13. Ayesha Sarfaraz

14. Farida Qureshi

15. Saleha

16. Mahin

17. Natasha Kamal

18. Basic

19. Sarah Arshad Gilani

20. Amna Chaudhry

21. Chikankari

22. House of Farah V

23. Sable Vogue

24. Zuri by Zainab Fawad

The sources said that the returns of above were being analyzed and desk audit was being conducted.
The information obtained about their income would be cross matched with declared income and wealth statement filed and withholding statement filed by withholding agents.

The tax office estimated huge loss of revenue would be detected.

Notices under section 176 of Income Tax Ordinance, 2001 have been issued and further progress would be finalized by February 27, 2020.

February 20, 2020
IR officers to get information of importers through online customs system

KARACHI: The officers of Inland Revenue to access online system of customs clearance for monitoring of withholding tax collected from importers.

The sources in Federal Board of Revenue (FBR) said that the Collectors of Customs of Sea Ports/Dry Ports are obliged to collect withholding tax on imports as per prescribed rates.

In the case of goods/equipments imported through Airways, each Collector is obliged to collect tax at the time of clearance. Statements are to be filed on monthly basis.

Tax under this section is collected from all, except from the imports by Government or exempt entities on the basis of certificate issued by a Commissioner.

The sources said that Large Taxpayers Units (LTUs) and Regional Tax Offices (RTOs) have access to WeBOC – the online customs clearance system – for accessing the documents filed by importers for determination of withholding tax at import stage.

According to official documents for monitoring of withholding taxes, said that the authorized officer of each RTO should coordinate with Customs authorities, hold macro analysis of imports by Government, by other agencies, those treated exempt, and perform the system audit of imports, if required.

The exemptions allowed to the imports made by exempt entities, the cases where Commissioner issued exemption certificates or SRO based exemptions were allowed; need to be examined to ascertain their admissibility.

Categorization of imports, as provided in the online system should be strictly enforced by the Customs authorities. Concerned RTO should coordinate the matter accordingly.

A centralized web based system has been introduced for issuance of certificates by the Commissioners and creation of a centralized Database.

On-line verification of certificates by the concerned authorities will form part of it. This is necessary for ascertaining the genuineness of exemption certificates.
PRAL should send the data received from NBP/Customs House to each RTO on daily basis.

Tax collected as per Customs data and tax actually deposited in NBP and reported through CAP should be reconciled by PRAL on monthly basis with the RTO as part of normal exercise for reconciliation of revenue. Discrepancies should be reported to concerned Collector/ PRAL for reconciliation.

A comprehensive scheme of allotting tax numbers is in place. All importers should essentially have a Tax Registration Number that is either NTN or Free Tax Number (FTN) and no import should be allowed without a valid tax number.

February 19, 2020
FBR bans leaves of officials for revenue collection

ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday banned all kind of leaves of its officers and officials with immediate effect in order to collect revenue in the remaining period of current fiscal year.

In an official note issued by the FBR said that it had been observed with concern that field formations of the FBR were forwarding requests for grant of leaves, including ex-Pakistan leave despite the fact that the third quarter (January March) of the current fiscal year was nearing its completion and the entire tax machinery was required to accelerate its efforts to achieve the assigned budgetary targets through full devotion during the balance part of the current financial year.

Therefore, it has been decided by the FBR that requests for grant of ex-Pakistan leaves may not be forwarded to the board by the respective heads of field formations till June 30, 2020, except, requests for Hajj, Umrah and Ziarat.

“All such cases shall be processed in the Board after the beginning of next financial year,” the FBR said.

“Similarly, local leaves/leaves of other kind may also not be granted liberally and may only be allowed in the light of special circumstances/hardship cases,” the FBR added.

February 19, 2020
Stockbrokers to provide information under AEOI

KARACHI: Federal Board of Revenue (FBR) has asked stock brokers to provide information of foreign investors for Automatic Exchange of Information (AEOI).

Pakistan Stock Exchange (PSX) on Tuesday referring to the FBR notice related to filing of Common Reporting Standards (CRS) Reports 2020.

The FBR said that the Reporting Financial Institutions (RFIs) are required to obtain, maintain and file CRS information in accordance with Section 165B and 107(1) of Income Tax Ordinance, 2001 and the Common Reporting Standards Rules contained in Income Tax Rules, 2002.

The said information has to be reported to FBR on annual basis on May 31 through the AEOI portal. The reports from RFIs are due on May 31, 2020.

The FBR asked the stock exchange to direct the RFIs to ensure timely compliance as per law and rules, failing which the RFIs shall be penalized under Section 182 of the Income Tax Ordinance, 2001.

Under Section 165B of Income Tax Ordinance, 2001 furnishing of information by financial institutions, including banks, is mandatory.

(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 of1947) and any regulations made under the State Bank of Pakistan Act,1956 (XXXIII of 1956) on the subject, every financial institution shall make arrangements to provide information regarding non-resident or any other reportable persons to the FBR in the prescribed form and manner for the purpose of automatic exchange of information under bilateral agreement or multilateral convention.

(2) All information received under this section shall be used only for tax and related purposes and kept confidential.

(3) For the purpose of this section, the terms “reportable person” and “financial institution” shall have the meaning as provided in Chapter XIIA of the Income Tax Rules, 2002.

February 19, 2020
FBR extends ST, FE return date up to February 26

KARACHI: Federal Board of Revenue (FBR) has extended the last date for filing sales tax (ST) and federal excise (FE) return for the month of January 2020 up to February 26, 2020.

The FBR issued a notification on Tuesday addressing all chief commissioners Inland Revenue of Large Taxpayers Units and Regional Tax Offices to inform about extension in date of submission of sales tax and federal excise return for the tax period of January 2020.

The FBR said that the date has been extended for submission of sales tax and federal excise return up to February 26, 2020 for the tax period of January 2020, which was due on February 18, 2020.

February 18, 2020
FBR drafts rules to make recovery

ISLAMABAD: Federal Board of Revenue (FBR) on Monday issued draft rules for making recovery from persons holding money on behalf of taxpayers.
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February 18, 2020