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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.

  • Anti-Benami transactions rules notified as per law: FBR

    Anti-Benami transactions rules notified as per law: FBR

    ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday said that Benami Transactions (Prohibition) Rules, 2019 has been issued in accordance with the law.

    The FBR issued a rebuttal on a news item published in a daily on February 5, 2020 about the issuance of Benami Transactions (Prohibition) Rules, 2019.

    FBR has explained that Benami Transactions (Prohibition) Rules, 2019 under Benami Transactions (Prohibition), Act, 2017 were notified through SRO. 326(l)/2019 dated 11th March, 2019 by Dr. Hamid Ateeq Sarwar, Additional Secretary (IRS/BS-21 Officer).

    He is also holding the charge of Member (IR-Policy), FBR (HQ) since 4th December, 2018 vide FBR’s Notification No. 2236-IR-I/2018.

    It is further clarified that all the Members of FBR hold the ex-officio rank of Additional Secretary as per Establishment Division’s Notification dated March 18, 1987.

    It is pertinent to mention at the time of issuance of instant SRO Mohammad Jehanzeb Khan (BS-22 officer of PAS) was holding the charge of Chairman, FBR / Secretary Revenue Division.

    After final vetting of Benami Transactions (Prohibition), Rules 2019 by Law & Justice Division and approval of the same by Cabinet Committee for Disposal of Legislative Cases (CCLC), the Summary containing the Benami Transactions (Prohibition) Rules, 2019 was moved by Mohammad Jehanzeb Khan Chairman, FBR / Secretary Revenue Division for the approval of Federal Cabinet.

    The whole process of issuance of SRO and initiation of Summary for approval of Federal Cabinet is in legal conformity.

  • Shabbar Zaidi still chairman, to resume charge after leave: FBR

    Shabbar Zaidi still chairman, to resume charge after leave: FBR

    ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday said that Syed Shabbar Zaidi is still Chairman of the FBR but he is on leave.

    While clarifying new reports about the vacancy of office of Chairman, FBR, Dr. Hamid Ateeq Sarwar, Spokesperson for the FBR / Member (IR-Policy) clarified that Syed Muhammad Shabbar Zaidi, Chairman, FBR is on medical leave and he will assume the charge of Chairman, FBR as soon as he gets medically fit.

    However, the position of Chairman, FBR during the leave period of Syed Muhammad Shabbar Zaidi is not lying vacant and Ms. Nausheen Javaid Amjad (IRS/BS-22 Officer) is holding the Look After Charge of the Chairperson, FBR as notified by FBR’s Notification No. 0184-IR-I/2020 dated January 31, 2020.

  • FBR conducts audit of all refund cases

    FBR conducts audit of all refund cases

    ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday said that the tax machinery conducts audit of all refund cases.

    “It is baseless to assume that FBR does not conduct the scrutiny. The processing of the case may take time but it is certain that all refund cases are audited,” the FBR said.

    In this regard, the FBR issued a clarification on the news aired on electronic media about the issuance of fake refunds.

    FBR has explained that two processes are being used to deal with refund cases.

    The first is the processing of refunds through automated system for the exporters.

    In this process, the audit of the refund is conducted after the issuance of refunds.

    The other system of refund issuance has been devised for the taxpayers not associated with the export sector.

    The refunds issued through this mode are called the “carry forward refunds.” Such refunds are issued once in a year. The audit is conducted before the issuance of such refunds.

    FBR has clarified that taxpayers involved in presenting the wrong invoices are dealt strictly and recovery is made from them.

    Moreover, penalty and default surcharge is also imposed to curb this practice.

    Sometimes, the audit process of refunds takes longer period of time which may cause problem of liquidity for the exporter, in case of delayed issuance of refunds.

    To avert liquidity crunch for the businesses, the refunds are issued and the scrutiny is conducted afterwards.

    There are certain inbuilt checks within the system to match the input claim by one person with output claim by another person.

    To avoid revenue loss, FBR has almost resolved the issue of fake invoices. Sometimes, it becomes a little cumbersome and lengthy to check the flying invoices but the scrutiny is conducted in all the cases. FBR has computer analytics system of CREST.

  • Income tax return filing hit record high of 2.78 million

    Income tax return filing hit record high of 2.78 million

    ISLAMABAD: The income tax return filing of tax year 2018 has reached to record high of 2.785 million by February 02, 2020, according to latest Active Taxpayers List (ATL) issued by Federal Board of Revenue (FBR) on Monday.

    The FBR sources said that the actual number of return filers is higher than the persons appeared on the ATL. They said that those people filing return without penalty amount would not qualify for the ATL.

    The record increase in return filing has been attributed to the amendment to Income Tax Ordinance, 2001 through Finance Act, 2019.

    In the last budget 2019/2020 a new Tenth Schedule was inserted to Income Tax Ordinance, 2001 under which persons not appearing on ATL would liable to pay 100 percent more withholding tax on certain transactions.

    The ATL for tax year 2018 issued on March 01, 2019 in which 1.59 million names were appeared of those taxpayer, who filed their returns by due date.

    However, later the FBR granted extension in date for filing returns due to introduction of a tax amnesty scheme.

    The extension for filing income tax returns for tax year 2018 was granted up to August 09, 2019.

    The return filing up to August 09, 2019 for tax year 2018 jumped up to 2.5 million from 1.59 million returns, which were part of the first ATL issued March 01, 2019.

    The insertion of Tenth Schedule to Income Tax Ordinance, 2001 speed up the return filing by taxpayers in order to avoid higher tax rate on certain transactions.

    Previously, people filing their annual income tax returns after due date were not allowed to appear on the ATL. However, another provision was added to the main statute under which persons by paying penalty can include their name to ATL.

    Therefore, since August 09, 2019 the FBR received around 285,000 tax returns for tax year 2018 till February 02, 2020.

    The FBR will issue ATL for tax year 2019 on March 01, 2020 and till then the prevailing ATL will be applicable for the purpose of withholding tax rates on certain transactions.

  • FBR gets CNIC details of motor vehicle buyers

    FBR gets CNIC details of motor vehicle buyers

    KARACHI: Motor vehicle manufacturers and dealers have shared details of Computerized National Identity Card (CNIC) of buyers with the Federal Board of Revenue (FBR), sources said on Monday.

    The sources said that the FBR has received the information of buyers who made purchases during first half (July – December) of current fiscal year.

    Besides manufacturers and dealers of motor vehicles, registration authorities, banks and leasing company have also provided details of buyers for the period.

    The FBR gets details of purchasers, included: name and address of purchaser/lessee; NTN/CNIC of purchaser/lessee; registration of number of motor vehicle; motor vehicle make, model, engine capacity; year of manufacture; date of first registration of the vehicles in Pakistan; registered capacity/laden weight of the vehicle; and ex-factor price of motor vehicle.

    The withholding agents as defined above are liable to collect withholding tax under Section 231B of the Income Tax Ordinance, 2001.

    As per Section 231 of the Ordinance, every motor vehicle registering authority of Excise and Taxation Department shall collect advance tax at the time of registration of a motor vehicle.

    Further, every leasing company or a scheduled bank or non-banking financial institution or an investment bank or a modaraba or a development finance institution, whether sharia compliant or under conventional mode, also require to collect withholding tax at the time of leasing of motor vehicle.

    The FBR sources said that huge undeclared money was used for purchase of motor vehicles. Therefore, the FBR will identify persons on the basis of information received, who are not in the tax net.

    As per Section 114 of the Income Tax Ordinance, 2001 every person own 1000CC and above motor vehicles are required to file annual income tax return.

  • Chartered accountants liable to penal action for issuing false tax certificate

    Chartered accountants liable to penal action for issuing false tax certificate

    KARACHI: Any auditor of professional accountancy firm is liable to penal action in case found guilty of misconduct in furnishing false tax certificate, sources in Federal Board of Revenue (FBR) said.

    Referring to Section 8B of Sales Tax Act, 1990, the sources said that tax authorities allowed input tax adjustment to a taxpayer on the basis of certificate issued by auditors of professional accountancy firms.

    “Any auditor found guilty of misconduct in furnishing the certificate mentioned in sub-section (2) shall be referred to the Council for disciplinary action under section 20D of Chartered Accountants, Ordinance, 1961,” according to Sales Tax Act, 1990.

    Section 20D of Chartered Accountants Ordinance, 1961 explains:

    “20-D. Orders by the Council if member found guilty.-(1) If, on receipt of the report under Section 20-B the Council is of opinion that the member of the Institute has been guilty of any professional misconduct specified in Schedule I, it may, after affording such member an opportunity of being heard, either personally or through counsel or another member of the Institute, make any of the following orders, namely:-

    (a) Reprimand or warn such member;

    (b) Impose such penalty as it may deem necessary not exceeding one thousand rupees; and

    (c) Remove the name of such member from the Register for a period not exceeding five years:

    Provided that, where it appears to the Council that the case is one in which the name of such member ought to be removed from the Register for a period exceeding five years or permanently, he shall not make any order but shall refer the case to the High Court with its recommendations thereon.

    (2) If the Council is of opinion that the member of the Institute is guilty of a professional misconduct specified in Schedule II, it shall refer the case to the High Court with its recommendations thereon.

    According to Section 8B of Sales Tax Act, 1990 taxpayers have not been allowed to adjust input tax except for some cases.

    Following is Section 8B of the Act:

    “8B. Adjustable input tax.– (1) Notwithstanding anything contained in this Act, in relation to a tax period, a registered person shall not be allowed to adjust input tax in excess of ninety per cent of the output tax for that tax period:

    Provided that the restriction on the adjustment of input tax in excess of ninety percent of the output tax, shall not apply in case of fixed assets or Capital goods:

    Provided further that the Board may by notification in the official Gazette, exclude any person or class of persons from the purview of sub-section (1).

    (2) A registered person, subject to sub-section (1), may be allowed adjustment or refund of input tax not allowed under sub-section (1) subject to the following conditions, namely:–

    (i) in the case of registered persons, whose accounts are subject to audit under the Companies Ordinance, 1984, upon furnishing a statement along with annual audited accounts, duly certified by the auditors, showing value additions less than the limit prescribed under sub-section (1) above; or

    (ii) in case of other registered persons, subject to the conditions and restrictions as may be specified by the Board by notification in the official Gazette.

    (3) The adjustment or refund of input tax mentioned in sub-sections (2), if any, shall be made on yearly basis in the second month following the end of the financial year of the registered person.

    (4) Notwithstanding anything contained in sub-sections (1) and (2), the Board may, by notification in the official Gazette, prescribe any other limit of input tax adjustment for any person or class of persons.

    (5) Any auditor found guilty of misconduct in furnishing the certificate mentioned in sub-section (2) shall be referred to the Council for disciplinary action under section 20D of Chartered Accountants, Ordinance, 1961 (X of 1961).

    (6) In case a Tier-1 retailer does not integrate his retail outlet in the manner as prescribed under sub-section (9A) of section 3, during a tax period or part thereof, the adjustable input tax for whole of that tax period shall be reduced by 15 percent.”

  • FBR gets information of property transactions

    FBR gets information of property transactions

    KARACHI: Federal Board of Revenue (FBR) has received information of buyers and sellers of immovable properties during the period July – December 2019, sources said.

    The sources in tax offices told PkRevenue.com that bulk of information was provided by provincial property registrar offices and housing societies along with complete details of buyers and purchasers.

    The sources said that the information would be used for detecting concealment of tax money and quantum of black money used in transactions.

    The sources said that there was huge gap between values of property declared at the time of registration or transfer with fair market values.

    They said that the property registrar offices and housing societies on behalf of the FBR collect withholding tax and deposit the same into the national kitty. Besides, working as withholding agents they also require to provide information of buyers and sellers under Section 165 of Income Tax Ordinance, 2001.

    The withholding agents under Section 165 are require to obtain information of persons making transactions such as: name, Computerized National Identity Card Number (CNIC), National Tax Number (NTN), and address of each person from whom tax was collected or to whom payments were made from which tax was deducted.

    As per law the withholding agents are required to provide details of all transactions and persons involved to the FBR by January 31, 2020 for the period July – December 2019.

    The sources said that the withholding agents require to collect withholding tax from seller under Section 236C and from buyers under Section 236K of the Ordinance.

    They said that in scrutiny process on the basis of information the tax offices would ask banks to provide payments details of buyers and sellers to identify the actual amount paid for transactions.

    The sources said that the tax authorities had been empowered to take action where fair market value was not declared in purchase of immovable properties.

    The real estate business is believed to parking lot for black money in Pakistan. Over the last few years the FBR made significant progress to encourage clean transactions in buying and selling of immovable properties.

  • Income tax return filing increases by 42%

    Income tax return filing increases by 42%

    ISLAMABAD: The filing of income tax returns has registered over 42 percent growth for tax year 2019 as compared with tax year 2018.

    Federal Board of Revenue (FBR) on Saturday said that the number of annual returns filed for tax year 2019 2.342 million by January 31, 2020 as compared with 1.645 million returns for tax year 2018 filed till January 31, 2019.

    The FBR attributed the increase in the return filing to improved confidence of people on the tax authorities.

    However, the FBR extended the last date for filing income tax return for tax year 2019 up to February 28, 2020.

    The FBR said that the tax collection for January 2020 was Rs320 billion which was 17 percent higher than in the revenue collected in the same month of the last year, showing 17 percent growth. Similarly, the total collection also registered 17 percent growth.

    The FBR said that the tax revenue on domestic sources posted 30 percent increase, which was never seen in the past.

    The FBR also issued refunds amounting to Rs120 billion in the current fiscal year as compared with Rs65 billion in the last fiscal year.

  • Registered persons to pay Rs5,000 as penalty for each invoice for not obtaining CNIC

    Registered persons to pay Rs5,000 as penalty for each invoice for not obtaining CNIC

    KARACHI: Federal Board of Revenue (FBR) has said that registered persons to pay Rs5,000 as penalty amount on each invoice for failure to obtain CNIC information of buyers.

    Sources in the FBR said that as per updated Sales Tax Act, 1990 up to December 31, 2019 any person who fails to issue an invoice when required under this Act, then such person shall pay a penalty of five thousand rupees or three percent of the amount of the tax involved, whichever is higher.

    The penal amount has been specified for Section 23 of the Sales Tax Act, 1990, which mainly deals with tax invoices issued by registered persons, who are also liable to obtain information of Computerized National Identity Card (CNIC) of buyers on sales above Rs50,000.

    The mandatory condition of obtaining CNIC information of unregistered persons has been applicable from February 01, 2020, which was to be applied from August 01, 2019.

    As per the updated Sales Tax Act, 1990, the section said:

    23. Tax Invoices.– (1) A registered person making a taxable supply shall issue a serially numbered tax invoice at the time of supply of goods containing the following particulars, in Urdu or English language, namely:

    (a) name, address and registration number of the supplier;

    (b) name, address and registration, number of the recipient and NIC or NTN of the unregistered person, as the case may be, excluding supplies made by a retailer where the transaction value inclusive of sales tax amount does not exceed rupees fifty thousand, if sale is being made to an ordinary consumer.

    Explanation. – For the purpose of this clause, ordinary consumer means a person who is buying the goods for his own consumption and not for the purpose of re-sale or processing:

    Provided that the condition of NIC or NTN shall be effective from 1st August, 2019;

    (c) date of issue of invoice;

    (d) description including count, denier and construction in case of textile yarn and fabric, and quantity of goods;

    (e) value exclusive of tax;

    (f) amount of sales tax; and

    (g) value inclusive of tax:

    Provided that the Board may, by notification in the official Gazette, specify such modified invoices for different persons or classes of persons; Provided further that not more than one tax invoice shall be issued for a taxable supply.

  • FBR chairman Shabbar Zaidi on indefinite leave

    FBR chairman Shabbar Zaidi on indefinite leave

    ISLAMABAD: Syed Muhammad Shabbar Zaidi, Chairman, Federal Board of Revenue (FBR) has gone on leave for indefinite period.

    According to a notification issued by the revenue board, Ms. Nausheen Javaid Amjad, BS-22 officer of Inland Revenue Service (IRS) has been assigned look after charge of the post of Chairman FBR with effect from January 31, 2020 during the leave period of Syed Muhammad Shabbar Zaidi.

    The notification has mentioned the start date of leave of the FBR chairman but there is no date mention about his joining.

    Previously Shabbar Zaidi was on leave from January 06, 2020 and FBR notification mentioned his date of joining from January 19, 2020.

    The latest notification about the leave of Shabbar Zaidi has strengthened the rumors that there was confusion in the economic team of the country.

    Sources said that Shabbar Zaidi was on leave due to bad health conditions.

    Shabbar Zaidi was appointed in May 2019 as Chairman of the FBR from private sector. He is the 26th chairman of the FBR.

    Following is the list of FBR chairmen:

    1)Mr. Mohammad Jehanzeb Khan29.08.2018  —-
    2)Ms. Rukhsana Yasmin02.07.2018 29.08.2018
    3)Mr. Tariq Mahmood Pasha04.07.2017 02.07.2018
    4)Dr. Muhamad Irshad19.01.2017 30.06.2017
    5)Mr. Nisar Muhammad Khan17.11.2015 18.01.2017
    6)Mr. Tariq Bajwa02-07-2013 17.11.2015
    7)Mr.Ansar Javed10-04-2013 30-06-2013
    8)Mr. Ali Arshad Hakeem10-07-2012 09-04-2013
    9)Mr. Mumtaz Haider Rizvi21.01.2012 10-07-2012
    10)Mr. Salman Siddique24.12.2010 21.01.2012
    11)Mr. Sohail Ahmad18.05.2009 24.12.2010
    12)Mr. Moinuddin Khan02.01.1998 06.11.1998
    13)Mr. Hafeezullah Ishaq11.11.1996 02.01.1998
    14)Mr. Shamim Ahmed28.08.1996 11.11.1996
    15)Mr. Alvi Abdul Rahim13.07.1995 28.08.1996
    16) Mr. Sajjad Hasan24.07.1991 03.10.1991
    17)Mr. Ahadullah Akmal16.08.1990 24.07.1991
    18)Mr. Ghulam Yazdani Khan22.01.1989 11.08.1990
    19)Syed Aitezazuddin Ahmed20.08.1988 02.01.1989
    20)Mr. I.A. Imtiazi11.08.1985 20.08.1988
    21) Mr. Fazlur Rahman Khan14.12.1980 11.08.1985
    22)Mr. N.M. Qureshi12.11.1975 14.12.1980
    23)Mr. M. Zulfiqar01.10.1974 12.11.1975
    24)Mr. Riaz Ahmad17.11.1973 30.09.1974
    25) Mr. M. Zulfiqar11.10.1971 17.11.1973