ISLAMABAD: The National Assembly has approved the law for imposition of harsh fine and penalties upon manufacturers and retailers for obstructing tax authorities in monitoring business activities.
(more…)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 notifies zero percent sales tax on services for construction industry
ISLAMABAD: Federal Board of Revenue (FBR) on Monday notified sales tax on service at zero percent for construction industry as part of incentives announced by the prime minister for construction sector.
The FBR issued SRO 326(I)/2020 to amend Islamabad Capital Territory (Tax Services) Ordinance 2001, to reduce the sales tax on services at zero percent from five percent.
The FBR said that services provided by property developers and promoters (including allied services) relating to low-cost housing schemes sponsored or approved by Naya Pakistan Housing and Development Authority or under Government’s Ehsaas program, the rate of tax shall be zero percent subject to the condition that no input tax adjustment or refund shall be admissible.
-
FBR exempts capital gain tax on sale of immovable properties
KARACHI: Federal Board of Revenue (FBR) has exempted capital gain tax on sale of immovable property under Tax Laws (Amendment) Ordinance, 2020.
A new clause (114AA) has been inserted in Part I of the Second Schedule to the Ordinance, whereby exemption from tax on capital gains has been provided to a resident individual on sale of constructed residential property (a house having land area up to 500 square yards and a flat having an area up to 4000 square feet) used only for personal accommodation by the said individual, his spouse or dependents and for which any of the utility bills are issued in the name of such individual.
The exemption shall not apply if it has been previously availed by such persons.
No amendment has been, however, made in section 236C of the Ordinance, which implies that sale of the above properties will remain subject to collection of advance tax at 1% of sale consideration, unless the seller obtains an exemption certificate from the Commissioner.
As per current provisions, capital gains on disposal of constructed property whose holding period exceeds four years is zero rated. Furthermore, in case such property is sold within one year of holding period, the amount of advance tax collected under section 236C at 1 percent of sale consideration is treated as minimum tax. It, therefore, appears that the purpose of this amendment is to provide an exemption from tax on capital gains on disposal of such constructed properties, which are held for less than four years.
-
FBR issues procedure for sealing of transit cargo destined for India
KARACHI: Federal Board of Revenue (FBR) has issued procedure for sealing of transit trade cargo containers at Torkham-Peshawar and Chaman-Quetta, destined for Wahga border station for India.
Following procedure to be adopted under Customs General Order (CGO) No. 03 of 2020 under Pakistan Customs Container Security System (PCCSS) Procedure for sealing and desealing of transshipment, safe transportation, transit and export cargo.
(a) NON-CONTAINERIZED CARGO:
FIRST PORTION:
(i) After the goods, loaded in high wall Transport Unit (1st Transport Unit) of Afghanistan been processed as per rules by Torkham/Chaman Customers, the Transport Unit will be secured and covered in proper tarpaulin. The PCCSS staff Focal point (Entry) will enter the required data and apply the wire punch plomb seal or a wire seal. The container will be allowed to proceed to Peshawar/Quetta Dry Port under escort. The escort officer of Customs will carry he convoy note to Peshawar/Quetta Dry Port.
(ii) On arrival at Customs Dryport Quetta/Peshawar, the 1st Transport Unit will be moved to the Focal Point Exit. The escort officer of customs will hand over the convoy note to the PCCSS officer.
(iii) The PCCSS will enter the exact time and date of the arrival. In case the Transport Unit reaches within time, the PCCSS officer will inspect the truck and security of tarpaulin ad the registration number of the 1st Transport Unit and check the PCCSS wire punch plomb seal.
(iv) After satisfying himself that the seal and container are intact and not tampered, the PCCSS officer will generate discharge note which will be given to the Customs escort officer along with the convoy note.
(v) If the seal or container etc. is not found intact or there are reasons to doubt the integrity of cargo or seal, a discrepancy report will be filled out on the computer. The concerned PCCSS focal point will also report the matter to the Directorate of Transit Trade having jurisdiction for initiating necessary action under the law.
(vi) The Focal Point Exit Peshawar staff will cut and collect the used plomb seals and keep in a safe disposal box. The Incharge FP (Exit) will make arrangements for the proper disposal, recycling of the plomb seals.
(vii) The escort will return the convoy note to the Customs at Border Crossing Point.
SECOND PORTION:
(i) The goods will be loaded on the Pakistani trucks, hereinafter called the Second Transport Unit and released in the same as done at Border Crossing Point, with wire punch plomb seal or new wire seal by the Focal Point Entry staff at Peshawar/Quetta.
(ii) On arrival at Wahga border station, the Second Transport Unit will be moved to the Focal Point Exit and the escort officer of Customs will hand over the convoy note to the PCCSS officer.
(iii) The PCCSS officer will enter the exact time and date of the arrival. In case the Transport Unit reaches within time, the PCCSS officer will inspect the truck and security of the tarpaulin cover, check the registration number of the Second Transport Unit and the PCCSS wire punch plomb seal.
(iv) After satisfying himself that the seal and container are intact and not tampered, the PCCSS- officer will generate discharge note which will be given to the Customs escort officer alongwith the convoy note.
(v) If the seal or container etc. is not found intact or there are reasons to doubt the integrity of cargo or seal, a discrepancy report will be filled out on the computer. The concerned PCCSS focal point will also report the matter to the Directorate of Transit Trade having jurisdiction of initiating necessary action under the law.
(vi) The Focal Point Exit Wahga staff will cut and collect the used plomb seals and keep in a safe disposal box. The In charge FP (Exit) will make arrangements for the proper disposal, recycling of the plomb seals.
-
Think tank discusses viability of reducing GST to five percent
ISLAMABAD: The second meeting of think tank on Saturday discussed the viability of reducing General Sales Tax (GST) from existing 17 percent to five percent on consumer goods to kick start consumer spending.
Advisor to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Sheikh chaired the 2nd meeting of the Thinktank, recently constituted under the directions of Prime Minister, to deliberate on the Covid-19 related economic downturn and mitigation of ensuing risks.
The forum discussed the need and scope for bailout package for large businesses and exporters apart from gauging the viability of reduction of GST on consumer goods, from 17 percent to 5 percent, to kick-start consumer spending for next two years.
The constraints of FBR amid high revenue targets in a shrinking economy were highlighted by Finance Secretary. Decision in this regard would be made after detailed consultations.
The forum has been mandated to provide platform for collective thinking on the emerging situation resulting from the Covid-19 related medical crisis and its spillover to economy.
Its other members include Shaukat Tareen, Dr. Ishrat Husain, Dr. Ijaz Nabi, Sultan Ali Allana, Arif Habib, Dr. Waqar Masood. Advisor to PM on Commerce and Finance Secretary are also part of it.
After extensive deliberations on emerging themes, the forum identified key areas for policy interventions, including monetary affairs and banking sector, fiscal matters and public finances, social safety nets, SMEs and large businesses, commodity prices, public health challenges and role of private sector and NGOs.
Advisor to PM on Finance apprised the forum about developments at G-20 forum regarding debt relief package. There is potential for USD 1.8 billion debt deferment for one year under this, whereas proceeds worth USD 1.4 billion under IMF have already been received.
Participants highlighted the need for further downward revision in policy rate coupled with passing on the benefits of slashed oil prices in global market to public. The focus of the deliberations remained on strengthening of aggregate demand and supply of the economy, with emphasis on lower income groups and small firms.
Need for further liquidity for banks was discussed as strong and vibrant banking sector is essential to boost economy under such strong recessionary headwinds. Ways to further encourage remittances, agriculture financing and timely lifting of crops and vegetables from small farmers were analyzed.
The progress of ongoing cash disbursements under Ehsas program were shared. The need for gathering reliable data on recently laid-off works and timely cash transfers to the most vulnerable were emphasized.
Economists within the Think-tank stressed for the need of designing PSDP to facilitate labor intensive projects apart form crafting robust agriculture financing plans. The need for public private partnerships was elaborated to create fiscal space within public sector through these off-balance sheet financing arrangements which encourage private sector participation in public sector initiatives.
Professionals within group stressed for the need of oil price hedging, power sector debt securitization and creation of fiscal space through rescheduling of foreign and domestic debts. The need for designing lending programs for housing sector participants came under consideration including facilitation of end-users. The massive scope for mortgage backed financing in Pakistan was also highlighted.
Advisor to PM on Finance and Revenue took lead in picking most urgent themes for proper policy deliberations and decisions.
He shared that Prime Minster of Pakistan may participate in the next session to give boost to the work of this Forum which has been constituted to provide intellectual and professional insights to the Ministry in designing and implementing incentives for economy in pragmatic fashion.
Advisor decided that interventions with highest, medium and low impacts would be sorted out and aligned on the basis of short, medium and long term time horizons so that most essential tasks are pushed on priority basis, with proper funding and execution arrangements.
It was also decided that international think-tanks will be engaged for cross-leaning for select policy making players in Pakistan so that robust interventions are designed to bring relief to economy and most deserving segments of public.
-
Tax liability for 2020 to be discharged with return for builders, developers
KARACHI: Builders and developers are required to discharge tax liability for tax year 2020 with the tax return. Commenting on Tax Laws (Amendment) Ordinance, 2020, tax experts at PwC A Ferguson said that the annual tax liability for a project is to be computed by dividing the total liability of the project under the regime by the estimated life of the project in years (which shall not exceed 2.5 years).
(more…) -
FBR issues procedure for safe transportation of ISAF cargo
ISLAMABAD: Federal Board of Revenue (FBR) has issued procedure for movement of International Security Assistant Force (ISAF) cargo under Pakistan Customs Container Security System (PCCSS).
The FBR through a notification dated April 17, 2020 said that the procedure as followed for the transshipment cargo shall be applicable for sealing and de-sealing of ISAF cargo with the following modification:
(i) The containers will be sealed with customs machine readable seal at Karachi by PCCSS after representative of ISAF has inspected, verified and confirmed that the Bill of Lading (B/L) seal/ other seal are intact. Sealing will be done in presence of authorized agent.
(ii) The routes shall be specified by the PCCSS, and any different route or time taken en route will be informed to incharge PCCSS by the ISAF representative.
(iii) The private companies authorized by the FBR to carry ISAF cargo in addition to National Logistic Cell (NLC) will have their transport units registered with PCCSS and the Directorate of Transit Trade, Karachi, or as specifically allowed by Incharge PCCSS on, a case to case basis.
(iv) The unloading from Pakistani Transport Unit and loading on Afghan Transport Unit/authorized units will be done at Peshawar/Quetta dry port. In case unloading is done at the respective terminals of the private carriers, the Incharge PCCSS FP Peshawar/Quetta will coordinate with the FP, carriers and ISAF officials and depute PCCSS staff of these terminals for checking of seals. Officials of ISAF/American Consulate will check their own seals and may affix another seal of their own for their checking at Beghrem Base.
(v) The PCCSS FP Peshawar/Quetta will check the Customs seal as well as other seals and unless a discrepancy is noted, allow the change of transport after noting the number of Second Transport of the Form A. The staff on return to PCCSS Focal Point will enter the verification of the seal in the computer.
(vi) The PCCSS seals will be removed at Focal Point Exit Torkham/Chaman, scanned by the bar code reader and stored in the disposal receptacle.
(vii) Returning containers from Afghanistan will be sealed at Torkham/Chaman only if not empty, as per procedure adopted for ISAF at Karachi for container bound for Afghanistan. Empty containers will not be sealed.
Goods not to be sealed: All containerized cargo which is transshipped, in transit or for export is to be sealed. However, in case of large machinery and awkward loads wherein the seals cannot be applied, the decision will be taken by Incharge Focal Point based on the level of risk in transshipment of such cargo. The Incharge Focal Points will also decided if photographs are to be taken and sent to Incharge PCCSS. In such case the Form A will not carry a seal number, but will mention reasons for not sealing the cargo and whether a photograph of the load/cargo has been sent by e-mail.
-
Filing return mandatory for builders, developers under incentive scheme
KARACHI: The filing of income tax return and wealth statement has been made mandatory for builders and developers under new ordinance to provide incentives to construction industry.
According to Tax Laws (Amendment) Ordinance, 2020, builders and developers under the special tax regime are also required to electronically file annual tax returns (including wealth statements, wherever applicable) to be accompanied by evidence of tax payment.
Such a tax return will be considered as an assessment order issued under section 120 of the Ordinance, according to commentary on the ordinance issued by PWC A F Ferguson.
Tax liability for tax year 2020 is required to be discharged with the tax return.
It further said that a tax return or declaration of a builder or developer is considered void if it is based on misrepresentation or on suppression of facts and all the provisions of the Ordinance will apply unless such misrepresentation is due to a bona fide mistake.
No action is to be taken without providing an opportunity of being heard and without prior approval of Federal Board of Revenue (FBR).
-
SECP highlights difficulties in present tax regime
ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) has highlighted difficulties faced by corporate sector due to prevailing tax regime.
(more…) -
FBR asks taxpayers to provide IBAN for direct refund payment transfer
ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday asked taxpayers to provide IBAN of their bank accounts for receiving refund payment through online system.
FBR spokesman said that the tax body had devised a centralized system of online payment of Sales Tax, FED and Income Tax refunds directly in the bank account of the taxpayers.
For this purpose, FBR has requested the taxpayers to update their IRIS profile.
In the given bank account details area in the system, IBAN detail row is added wherein taxpayers are required to add their complete Bank’s IBAN number of same Bank Account whose details are already available in IRIS profile to receive Sales Tax, FED and Income Tax refund cheques.
FBR has advised the taxpayers to do the needful as soon as possible to avail electronic transfer facility.
Likewise, FBR has also required from the exporters to update their WEBOC profile and provide IBAN of the same Bank Account whose details are already available in WEBOC profile of the exporters to receive Custom Duty Drawback.
FBR has required the information to be provided as soon as possible to avail electronic transfer facility for Customs Duty Drawback payments.