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 appoints appraising, valuation officers

ISLAMABAD: Federal Board of Revenue (FBR) has appointed appraising and valuation officers (BS-16) in the Customs Department.

A notification issued on Thursday, the FBR said that consequent upon the recommendations of Federal Public Service Commission (FPSC), Islamabad vide letter No.F.4-180/2018-R-FS-I, dated 17.10.2019 and having accepted the terms and conditions of appointment contained in the offer of appointment letter No.2(9)/2015-Cus-III, dated 22.10.2019, the following candidates are hereby appointed as Appraising/ Valuation Officer (BS-16) in the Customs Department and their services are placed at the disposal of Customs field formations mentioned against each:-

01. Raafeh Nasar Chattha, Model Customs Collectorate (Appraisement) Lahore.

02. Haris Bukhtiar Khan, Model Customs Collectorate (Appraisement) Lahore.

03. Muhammad Ibrar Ibrahim, Model Customs Collectorate (Appraisement) Lahore.

The FBR said that their inter-se-seniority will be maintained in order of merit assigned by Federal Public Service Commission (FPSC) and in accordance with the Civil Servants (Seniority) Rules, 1993.

Other terms and conditions of their appointment will be the same as already conveyed vide FBR letter dated October 22, 2019.

3. They are advised to join the concerned Customs field formation immediately but not later than 06.12.2019.

November 21, 2019
Non-ATL to pay 20 percent tax on property sale through auction

KARACHI: Properties sold through auction to attract 20 percent advance tax for persons not appearing on Active Taxpayers List (ATL).

According to Income Tax Ordinance, 2001 updated till June 30, 2019 the advance tax rate on sale of property through auction would be 10 percent for persons, who filed their income tax returns by due date or filed after paying penalty.

However, the tax rate has been prescribed at 20 percent for persons not appearing on the ATL.

A taxpayer will only qualify for the ATL when he files annual income tax returns by due date or filed after due date with paying penalty.

Through Finance Act, 2019 a new Tenth Schedule was introduced to Income Tax Ordinance, 2001 under which persons not appearing on ATL will pay 100 percent additional tax.

Section 236 A of the Ordinance explained the advance tax at the time of sale by auction:

Section 236A: Advance tax at the time of sale by auction

Sub-Section (1): Any person making sale by public auction or auction by a tender, of any property or goods (including property or goods confiscated or attached) either belonging to or not belonging to the Government, local Government, any authority, a company, a foreign association declared to be a company under sub-clause (vi) of clause (b) of sub-section (2) of section 80, or a foreign contractor or a consultant or a consortium or Collector of Customs or Commissioner of Inland Revenue or any other authority, shall collect advance tax, computed on the basis of sale price of such property and at the rate specified in Division VIII of Part IV of the First Schedule, from the person to whom such property or goods are being sold.

Sub-Section (2): The credit for the tax collected under sub-section (1) in that tax year shall, subject to the provisions of section 147, be given in computing the tax payable by the person purchasing such property in the relevant tax year or in the case of a taxpayer to whom section 98B or section 145 applies, the tax year, in which the “said date” as referred to in that section, falls or whichever is later.

Explanation.- For the purposes of this section, sale of any property includes the awarding of any lease to any person, including a lease of the right to collect tolls, fees or other levies, by whatever name called.

Sub-Section (3): Notwithstanding the provisions of sub-section (2), tax collected on a lease of the right to collect tolls shall be final tax.”

November 21, 2019
FBR starts air travelers’ monitoring to detect money launderers, drug smugglers

ISLAMABAD: Federal Board of Revenue (FBR) has launched passenger profiling system at international airports to curb money laundering and drug smuggling.

A statement on Thursday said that Pakistan Customs, a wing of the FBR, has launched a specialized Risk Management System for passenger profiling at all major international airports in Pakistan.

This exercise is part of the Customs Border Management Initiative (BMI) recently approved by the prime minister.

The Passenger Profiling System, “Global Travelers Assessment System” (GTAS) is now operational at seven major airports of the country for which Customs staff has been adequately trained.

Moreover, World Customs Organization (WCO) and US Customs and Border Protection (US CBP) have provided Technical assistance for deployment and implementation of the project.

The system is capable of carrying out passenger profiling and targeting through Advance Passenger Information (API) and Passenger Name Record Information (PNR) for interdiction of suspected travelers, drug smugglers and money-launders etc. while adhering to the requirements of FATF action plan.

It will also help in creating profiles of passengers travelling to and from Pakistan and generate risk indicators in advance using a proactive methodology for effective border management.

According to Chairman FBR Syed ShabbarZaidi, the GTAS will also enable Customs to achieve the “Invisible Customs approach” with least presence at airports while facilitating the genuine passengers.

The Chairman has also directed Member Customs Operations to ensure adequate training sessions for customs officers while initiating data sharing with border agencies which will serve as a targeting portal for all law enforcement agencies at Pakistan Customs National Targeting Centre.

November 21, 2019
FBR extends date for filing sales tax return

ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday extended the last date for filing sales tax return up to November 25, 2019.

The FBR issued a circular dated November 20, 2019 and extended the date of submission of sales tax and federal excise return up to November 25, 2019 for the tax period of October 2019, which was due on November 18, 2019.

The FBR directed all chief commissioners Inland Revenue of Large Taxpayers Units (LTUs) and Regional Tax Offices (RTOs) to comply with the instructions and disseminate information to taxpayers.

November 20, 2019
Income tax on low cost housing projects reduced by 50 percent

KARACHI: The income tax rate on low cost housing projects shall be reduced by 50 percent, according to income tax law recently updated by the Federal Board of Revenue.

The FBR updated Income Tax Ordinance, 2001 incorporating changes introduced through Finance Act, 2019.

As per Second Schedule of the updated Ordinance, the tax payable on profits and gains derived by a person from low cost housing projects shall be reduced by fifty percent.

The reduction in tax liability under this clause shall apply to such project which is—

(a) owned and managed by a company formed for operating the said project and registered under the Companies Act, 2017 and having its registered office in Pakistan; and

(b) not formed by the splitting up, or the reconstruction or reconstitution, of a business already in existence or by transfer to a new business of any machinery or plant used in a business which was being carried on in Pakistan at any time before the commencement of the new business; and

(c) a low cost housing project under which the maximum sale price of a single housing unit is two and a half million rupees.

November 20, 2019
Privileged personnel allowed duty, tax free car import

KARACHI: Federal Board of Revenue (FBR) has granted duty, tax free import of cars to privileged personnel on first arrival in Pakistan.

According to Customs Rules 2001 the expression “privileged personnel” means all foreign experts, consultants or technicians visiting and resident in Pakistan under a proper Aid Agreement in which provision for the application of these Customs concessions has been made.

The expression includes only such personnel as are either directly in the employment of the foreign aid giving Government or Agency or who serve in Pakistan under contract or agreement with such Government or Agency and whose salaries and travelling expenses to and from Pakistan are paid by the foreign Government or Agency.

It does not include personnel in the employment of the Federal or Provincial Government.

The following customs concessions shall be extended to the privileged personnel, namely:-

Import free of custom duty and sales tax of articles for the personal use of the privileged person or members of his family forming part of his personal and household effects including one car per family on his first arrival in Pakistan.

The time limit for import will be six months, extendable by the Collector of Customs for a maximum period of 25[eighteen] months from the date of the arrival of the person concerned;

In addition to the above, a privileged person shall be allowed to import on payment of duty and taxes foodstuff and consumable stores including liquor and tobacco up to a C&F value of two hundred U.S.$ per month but the value of liquor will not exceed one hundred U.S.$ per month.

However, import of alcoholic beverages shall be subject to Import Policy Order.

Note: The privileged personnel may import the monthly quotas prescribed in clauses (a) and (b) of rule 39, for a maximum period of six months at a time.

Articles imported customs-duty and sales tax free shall normally be re-exported and shall not be sold or otherwise disposed of within Pakistan except with the prior approval of the Government or in terms of the regulations prescribed by the Government.

If any other durable articles such as air-conditioners, refrigerators, deep freezers, VCR ,DVD, washing machines, etc., are disposed of in Pakistan, customs-duty and sales tax, etc., shall be payable on the original value at the rate applicable to the goods in question at the time of import.

The privileged personnel shall be responsible for the payment of customs-duty and sales tax and other charges before parting with the articles; provided that no customs-duty and sales tax shall be payable if sold after three years from the date of import.

In order to avail of the concessions under this chapter , a privileged personnel shall furnish to the Customs authorities a certificate duly signed by the Administrative Ministry of the Government of Pakistan concerned both in respect of personal and household effects, etc., imported on first arrival and subsequent monthly imports of foodstuffs, consumable stores, liquors, and tobacco in accordance with the prescribed quotas.

The Administrative Ministry concerned shall verify that the conditions in the rules have been satisfied before issue of the certificate.

The Administrative Ministry shall also be generally responsible to ensure that all the other conditions as per this chapter have been satisfied between the time of arrival and departure of privileged personnel:

Provided that a foreign employee of an industrial venture shall be entitled to import free of customs-duties and other taxes food stuff (excluding alcoholic beverages) upto C&F value of one hundred US $ per month subject to the condition that he shall produce a certificate from his employer to the effect that he has been employed in his industrial venture in Pakistan for a specific year.

The monthly quota may be imported for a period of six months at a time.

November 19, 2019
Income tax shall not exceed 10 percent of profit from saving schemes

KARACHI: Tax laws have granted reduced rate of income tax on profit on investment in saving schemes.

According to updated Income Tax Ordinance, 2001 up to June 30, 2019 issued by Federal Board of Revenue (FBR) defined reduction in tax liability for various segments of taxpayers.

The ordinance said that the tax payable under clause (c) of sub-section (1) of section 39, in respect of any amount paid as yield or profit on investment in Bahbood Savings Certificate or Pensioners Benefit Account and Shuhada Family Welfare Account shall not exceed 10 percent of such profit.

As per Second Schedule of the Ordinance, the income, or classes of income, or person or classes of person, enumerated below, shall be allowed reduction in tax liability to the extent and subject to such conditions as are specified hereunder:-

(1) (1) Any amount received as-

(a) flying allowance by flight engineers, navigators of Pakistan Armed Forces, Pakistani Airlines or Civil Aviation Authority, Junior Commissioned Officers or other ranks of Pakistan Armed Forces; and

(b) submarine allowance by the officers of the Pakistan Navy, shall be taxed at 2.5 percent as a separate block of income:

Provided that the reduction under this clause shall be available to so much of the flying allowance or the submarine allowance as does not exceed an amount equal to the basic salary.

(1AA) Total allowances received by pilots of any Pakistani airlines shall be taxed at a rate of 7.5%, provided that the reduction under this clause shall be available to so much of the allowances as exceeds an amount equal to the basic pay.

The tax payable by a full time teacher or a researcher, employed in a non profit education or research institution duly recognized by Higher Education Commission, a Board of Education or a University recognized by the Higher Education Commission, including government research institution, shall be reduced by an amount equal to 25 percent of tax payable on his income from salary:

Provided that this clause shall not apply to teacher of medical profession who derive income from private medical practice or who receive share of consideration received from patients.

The amount of tax payable, in a year in which the rupee is revalued or devalued, by a taxpayer whose profits or gains are computed in accordance with the rules contained in the Fifth Schedule to this Ordinance and who had entered with the Government into an agreement which provides for such reduction, shall be reduced to the amount that would be payable in the absence of the revaluation or devaluation of the rupee.

In respect of old and used automotive vehicles, tax under section 148 shall not exceed the amount specified in Notification No. S.R.O. 577(I)/2005, dated the 6th June, 2005.

The amount of tax payable by foreign film-makers from making films in Pakistan shall be reduced by fifty percent on income from film-making in Pakistan.

The amount of tax payable by resident companies deriving income from film-making shall be reduced by seventy percent on income from film-making.

November 19, 2019
Tax return filing reaches to new record high of 2.68 million

ISLAMABAD: The number of income tax return filings has surged to a record level of 2.68 million for the tax year 2018, according to the latest statistics compiled up to November 17, 2019.
(more…)

November 18, 2019
Customs directed to verify seized vehicles carrying smuggled goods

ISLAMABAD: Syed Shabbar Zaidi, Chairman, Federal Board of Revenue (FBR) has directed customs authorities to launch verification of seized vehicles carrying smuggled goods.

A statement issued on Monday, the FBR chairman directed the customs field offices to identify smuggled items and take strict action against offenders.

On the instructions of Syed Shabbar Zaidi, Chairman FBR, Customs Wing has issued instructions to all its field formations to verify the genuineness of all seized conveyances being used to transport smuggled goods through verification from Forensic Science Laboratory, Registration Database of Excise & Taxation Department and Customs Clearance documents.

The field formations have been further instructed to initiate separate legal proceedings in case such conveyances are found to be smuggled or with tampered chassis number.

These instructions will greatly help in dismantling the smuggling network being used to transport smuggled goods.

In line with the recommendations of the Prime Minister’s Steering Committee on Anti-smuggling, Pakistan Customs being the country’s lead Anti-Smuggling Organization has accordingly stepped up enforcement actions in coordination with other Law Enforcement Agencies.

November 18, 2019
Half of registered companies not complying with mandatory return filing

ISLAMABAD: Almost half of the companies registered with Securities and Exchange Commission of Pakistan (SECP) have been found as non-compliant in mandatory income tax return filing.

The Year Book 2018/2019 of Federal Board of Revenue (FBR) revealed that 43,246 corporate returns were filed for Tax Year 2018.

However, the official details shared by SECP showed that it registered 87,622 companies by June 30, 2018.

According to Section 114 of Income Tax Ordinance, 2001 it is mandatory for every company to file annual income tax return.

The statistics of FBR’s Year Book 2018/2019, however, revealed that corporate return filing was gradually increasing.

However, despite all efforts the corporate return filing was increased to 43,246 for Tax Year 2018, which was 38,417 in Tax Year 2017 and 35,504 in Tax Year 2016.

The overall income tax return filing has witnessed sharp increase in tax year 2018. The FBR data showed that the total return filing increased to 2.66 million in tax year 2018 as compared with 1.89 million in tax year 2017, showing 41 percent increase.

The significant growth was seen in return filing by individuals. The individuals including salary and business filed 2.56 million annual returns for tax year 2018 as compared with 1.79 million in tax year 2017, showing 42.4 percent increase.

The FBR said that in past the trend for filing of income tax returns has not been satisfactory in Pakistan.

Keeping in view very low compliance, FBR had initiated a Broadening of Tax Base (BTB) drive few years ago, which has not started paying dividends in shape of growth in the number of filers.

The income tax returns which were just 1.5 million in tax year 2016 have crossed the two million mark first time in the history of FBR.

During tax year 2017 the number of income tax filers reached to 1.9 million and in tax year 2018 increased to 2.2 million.

During TY 2018 the number of return filers increased by 17.1 percent or 316,526 in absolute terms.

This performance in terms of number of returns is satisfactory but payment with returns has a meager growth of 3.0 percent, which is the matter of concern.

November 18, 2019