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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.

  • FBR asks banks to provide details of government securities investment

    FBR asks banks to provide details of government securities investment

    ISLAMABAD: Federal Board of Revenue (FBR) has asked banks to provide details of additional investment made into the government securities during the tax year 2019.

    The sources in FBR on Tuesday said that a commissioner of Inland Revenue had been empowered to ask the banking companies to furnish details of the investment in the federal government securities so as to ascertain the applicability of enhanced rate of tax.

    The FBR said that the rate of tax on taxable income of a banking company is 35 percent. “Through the Finance Act, 2019, a new rule 6C has been inserted to Seventh Schedule which provides tax rate of 37.5 percent on taxable income from federal government securities.”

    As per this rule, the taxable income arising from additional income earned from additional investment in the federal government securities for the tax year 2020 and onwards shall be taxed at the rate of 37.5 percent.

    “A banking company shall furnish a certificate from external auditor along with accounts while e-filing return of income certifying the amount of money invested in the federal government securities in the preceding tax year, additional investments made for the tax year and mark-up income earned from the additional investment for the tax year.”

    The FBR defines ‘additional income earned’ as to mean mark-up income earned from additional investment in the federal government securities by the bank for the tax year.

    The FBR also defines the term ‘additional investment’ as to mean average investment made in the federal government securities by the bank during the tax year, in addition to average investment held during the tax year 2019.

    As per sub-rule (3) of the rule 6C, the Commission may require the banking company to furnish details of the investment in the federal government securities so as the ascertain the applicability of enhanced rate of tax.

  • Non-ATL commission agents to pay up to 24 percent withholding tax

    Non-ATL commission agents to pay up to 24 percent withholding tax

    ISLAMABAD: Federal Board of Revenue (FBR) has said that commission agents not appearing on Active Taxpayers List (ATL) shall pay 24 percent withholding tax during tax year 2019/2020 effective from July 01, 2019.

    The FBR issued Withholding Tax Card for tax year 2019/2020 saying that the collection of withholding tax is payable under Section 233 of Income Tax Ordinance, 2001.

    The revenue body said that Federal Government, Provincial Government, Local authority, Company AOP constituted by or under any law or principal shall collect withholding tax from recipient of brokerage or commission or agent at the time the brokerage or commission is actually paid.

    The following rates shall be applicable:

    (i) Advertising Agents, the tax rate shall be 10 percent for compliant taxpayers and 20 percent for persons not appearing on ATL.

    (ii) Life insurance agents where commission received is less than 0.5 million per annum, the tax rate shall be 8 percent for compliant taxpayers and 16 percent for persons not appearing on ATL.

    (iii) Persons not covered in (i) & (ii), the tax rate shall be 12 percent for compliant taxpayers and 24 percent for persons not appearing on ATL.

  • FBR starts verifying imported goods in spot checking of markets, shopping plazas

    FBR starts verifying imported goods in spot checking of markets, shopping plazas

    ISLAMABAD: Federal Board of Revenue (FBR) has decided to launch mega crackdown against smuggled goods and in this regard joint teams of the revenue body will visit markets and shopping plazas in major cities of the country from September 01, 2019.

    The FBR on Saturday issued a notification related to anti-smuggling drive, which highlighted the adverse impact of smuggled goods on the economy in general and industrial activities in particular.

    The FBR said that it had started phased program, which included verification of imported documents of foreign goods available in the market.

    “With effect from September 01, 2019 special joint teams of the FBR may be visiting major shopping areas especially large retailers in major cities to check the import documents the imported goods available for sale to ensure compliance to various requirement of the law,” it said.

    The FBR clarified that such checking would not be called ‘raid’. “All teams will be conducting respective identification as being officially designated and the team will be headed by a senior person.”

    It further said that in case a retailer/shopkeeper had not documents at the time of checking then the team would provide adequate opportunity to submit the document in respective offices/shops after reasonable time.

    The FBR said that all relevant persons are expected to cooperate with the FBR personnel during this exercise which is being undertaken to ensure compliance of laws and discourage sale of smuggled goods.

    The FBR asked Member Customs (Operations) and Member (IR-Operations) to supervise the activity and provide complete assistance to the joint team wherever required.

    The FBR also directed Director General (I&I) and Director General (I&I) Inland Revenue to constitute joint teams under intimation to this office and concerned Member Operations keeping in view the scope of the activity on countrywide basis.

  • Karachi traders criticize FBR for not including in consultative committee

    Karachi traders criticize FBR for not including in consultative committee

    Traders associations from Karachi have strongly criticized the Federal Board of Revenue (FBR) for excluding representatives of small traders and shopkeepers from Pakistan’s commercial capital in its newly formed consultative committee on the fixed tax scheme.

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  • FBR constitutes consultative committee for fixed tax scheme

    FBR constitutes consultative committee for fixed tax scheme

    ISLAMABAD: The chairman of Federal Board of Revenue (FBR) on Friday constituted a committee to finalize fixed tax scheme and simplified tax procedure for traders.

    The committee has been constituted comprising following members:

    01. Ms. Nausheen Amjad, Member (TPA) – Convener

    02. Faheem ul Haq, Member, Accounting

    03. Ms. Seema Shakeel, Member (IR-Operations)

    04. Dr. Hamid Ateeq Sarwar, Member (IR-Policy)

    05. Ashfaque Tola, Chartered Accountant

    06. Abid Shaban, Advocate

    07. Naeem Mir, All Pakistan Anjuman-e-Tajiran

    08. Khawaja Sulaiman Siddique, Tanzeem-e-Tajran Pakistan

    09. Malik Khalid, Qaumi Tajir Ittehad, Pakistan

    10. Mohammad Ali Mian, Pakistan Traders Alliance

    11. Ashraf Bhatti, Anjuman-e-Tajran (Bhatti Group)

    12. Kashif Chaudhry, Tanzeem-e-Tajran Pakistan.

    The FBR said that the committee would discuss the various aspects of the draft of fixed tax scheme for small traders / shopkeepers and simplified tax procedure for traders and shall come up with finalization of the same in the present or amended form after through discussion and consultation.

    Member (IR-Policy), FBR shall act as secretary to the committee.

    The committee shall submit its recommendations not later than August 25, 2019 to the office of the chairman FBR.

    Related Post

    FBR issues simplified draft return, wealth statement forms for traders

  • FBR further extends date for filing sales tax, FE returns

    FBR further extends date for filing sales tax, FE returns

    ISLAMABAD: Federal Board of Revenue (FBR) on Friday extended the last date for filing sales tax and federal excise (FE) return for the tax period of July 2019.

    Previously the FBR extended the date for filing sales tax and federal excise return on August 09 considering the Eid holidays.

    As per the latest notification, the FBR further extended the date for filing and said that the annexures of sales and purchases, which are due on August 10, 2019 can be submitted up to August 19, 2019.

    The FBR said that payment of sales tax and federal excise duty, which is due on August 15, 2019 can be made up to August 21, 2019.

    Similarly, the date for submitting sales tax and federal excise return, which is due on August 18, 2019, has been extended up to August 23, 2019.
    The FBR said that the date has been extended considering the Eid holidays.

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    FBR extends date for filing sales tax, federal excise return

  • FBR posts six IR officials to FATF Cell

    FBR posts six IR officials to FATF Cell

    ISLAMABAD: Federal Board of Revenue (FBR) has appointed six officials of Inland Revenue to Financial Action Task Force (FATF) Cell.

    The FATF cell will be headed by Ijlal Khattak, Director (Headquarters) and other members are included: Zahid Bhatti, Additional Director (HQ); Sarwar Habib Malik, Deputy Director-I; Rizwan Shahzad, Senior Auditor; Yasir Shah, IIR; and Muhammad Yousuf, Assistant.

    A Financial Action Task Force (FATF FBR-IR) Cell is hereby constituted to ensure effective and timely completion of FATF related Action Plan and is placed under the Director General, Intelligence & Investigation-IR, Islamabad. The FATF (FBR-IR) Cell will serve as focal point for all activities related to Inland Revenue for FATF issues.

    The FATF (FBR-IR) Cell may seek information required for FATF related work from the Board, field formations, directorates and record of meetings.

    The head of field formations/directorates are requested to create enabling environment for this unit considering its sensitive nature.

    Related Posts

    FBR establishes FATF cell

  • FTO directs FBR, FIA to launch inquiry in misuse of gold, jewellery import

    FTO directs FBR, FIA to launch inquiry in misuse of gold, jewellery import

    ISLAMABAD: Federal Tax Ombudsman (FTO) in a suo moto case directed tax authorities and investigation agency to launch inquiry against officials, department and traders involved in misuse of gold import and other precious metals.

    The FTO asked the Federal Board of Revenue (FBR) and Federal Investigation Agency (FIA) to initiate inquiry against all the officers, departments and importer/exporters involved in misuse of import-cum-exports’ facility in respect of gold, jewellery and other precious metals resulting in massive loss of revenue to national exchequer.

    The FTO finding revealed that gold worth billions of rupees was either not exported against imported gold or was exported against fake form-E.

    The FTO observed that the export promotion scheme did not put in place institutional mechanism to stop abuse of entrustment scheme/self-consignment scheme regulated through concessional SROs issued by the ministry of commerce.

    “As a consequence, the importers-cum-exporters deceived the departments with impunity especially in cases where concession available under the entrustment scheme/self-consignment scheme was misused.”

    The entrustment scheme provides facility for export of jewellery against imported gold supplied as partial advance payment, by the foreign buyer to be used in the manufacture of jewellery to be exported.

    The exporter is required to export eligible and authorized items within 120 days from the date of import.

    Under self-consignment scheme export of gold jewellery is made from locally procured gold and gemstones and sale proceeds are realized in foreign exchange.

    According to the scheme the registered exporter shall apply to the Trade Development Authority (TDAP) for export authorization.

    The sale proceeds shall be realized within 120 days from the date of export and the commercial banks shall ensure that sale proceeds are repatriated in full within 120 days; otherwise, commercial banks shall inform State Bank of Pakistan (SBP) as well as to TDAP.

    The FTO observed that during special audit, the Directorate General of Internal Audit detected serious regularities of Model Customs Collectorate (MCC) Peshawar, MCC (Export) Port Qasim, Karachi, MCC Islamabad and MCC Preventive Lahore.

    It was further observed that repeated exports were made by exporters.

    Admittedly, foreign exchange was not repatriated against Form-E which subsequently turned out to be fake.

    “Ignoring the said fact, there is no explanation that how subsequent exports were allowed when it was evident that foreign exchange was not repatriated within the specified period.”

    “This reflects the negligence, intention and ineptitude in discharge of duties and responsibilities,” the FTO observed.

    The FTO further observed that it was rather strange that the collectorates had failed to recover the adjudged amount of the fine imposed on the clearing agents, who are, otherwise, licencee of the department.

    Perusal of record shows that either no stay had been granted or the period for stay of order under appeal had been lapsed. But the department had not initiated recovery proceedings for which no explanation could be advanced.

    “This again reflects negligence, inattention, inefficiency and ineptitude in discharge of duties and responsibilities by concerned officers/officials of the department which are tantamount to maladministration.”

    The FTO further said that the position emerged on the basis of information provided by TDAP and SBP, reveals that there is a gap between the value of import and value of export and lack of data synchronization related to data provided by the TDAP and SBP.

    It appears that the TDAP has not put in place any mechanism of monitoring and reporting of exports and imports taking place under SRO 760(I)/2013 dated September 02, 2013. In the absence of authentic and complete data of import and exports under the said SRO, no meaningful analysis can be carried out.

    The FBR recommended to the FBR to direct the chief collectors (North), (Central) and (Enforcement) South to initiate departmental enquiry to ascertain the officers/officials and take disciplinary action against those found involved in illegal/inadmissible import/exports.

  • FBR issues withholding tax rate on purchase of air tickets for tax year 2019/2020

    FBR issues withholding tax rate on purchase of air tickets for tax year 2019/2020

    KARACHI: Federal Board of Revenue (FBR) has issued adjustable withholding tax rate on purchase of international air ticket effective for Tax Year 2019/2020.

    The FBR said that airlines issuing the air tickets shall collect withholding tax under Section 236L of Income Tax Ordinance, 2001 from the purchasers of international air travel ticket at the time of realization of sale proceeds.

    The rate of advance tax on purchase of international air ticket:

    (i) First/ Executive class: Rs16,000 per person

    (ii) Others excluding Economy: Rs12,000 per person

    (iii) Economy: no tax.

    The FBR said that as per Finance Act, 2019, the provisions of newly inserted 10th schedule of the Income Tax Ordinance, 2001 shall not apply on tax collected under section 236L.

    As per the Tenth Schedule of the Ordinance, the person not appearing on the ATL shall pay 100 percent enhanced withholding tax on making transactions.

    The FBR said that on purchase of domestic air ticket under Section 236B the advance tax shall be 5 percent of gross amount of ticket.

    The adjustable advance tax shall be collected by person preparing air ticket from purchaser of domestic air travel ticket at the time of realization of sale proceeds.

    The FBR said that as per Finance Act, 2019, the provisions of newly inserted 10th schedule of the Income Tax Ordinance, 2001 shall not apply on tax collected under section 236B.

  • Withholding tax rates for foreign fund transfers through debt, credit cards

    Withholding tax rates for foreign fund transfers through debt, credit cards

    ISLAMABAD: Federal Board of Revenue (FBR) has issued withholding tax card for tax year 2020, effective from July 1, 2019 and notified 2 percent advance tax to be collected on gross amount of foreign transfers from persons not appeared on Active Taxpayers List (ATL).

    The FBR said that every banking company is required to collect advance under section 236Y of Income Tax Ordinance, 2001, from person remitting amounts abroad.

    The FBR further explained that the banking companies shall collect the advance tax from a person who has completed a transaction of credit card, or debit card, or pre-paid card, with a person outside Pakistan at the time of transfer of any sum remitted outside Pakistan through a transaction of a credit card or debit card or pre-paid card.

    The advance tax shall be one percent on a person who filed income tax return within due date.

    In case persons not appearing in the ATL, the applicable tax rate is to be increased by 100 percent i.e. two percent.

    The advance tax on persons remitting amounts abroad through credit or debit or prepaid cards under Section 236Y was introduced through Finance Act, 2018.

    The tax rate under this section during tax year 2019 was one percent of the gross amount remitted abroad for filers and three percent for non-filers.