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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.

  • Illicit money given amnesty through package to construction industry

    Illicit money given amnesty through package to construction industry

    ISLAMABAD: The government has given an amnesty to illicit money in case of investment made into to construction industry as no question of money to be asked under Income Tax Ordinance, 2001.

    Federal Board of Revenue (FBR) on Monday issued the Tax Laws (Amendment) Ordinance No.1 of 2020 after the approval from the president.

    The ordinance says that it was being promulgated, “whereas, the COVID-19 pandemic has created a worldwide crisis due to which industries, businesses, offices, service has been shut down in Pakistan and economic activity is at a standstill.”

    “And whereas, in order to protect and revive the economy of Pakistan, it is essential and critical to give incentives for revival of the construction industry with certain conditions as provided for in this ordinance.”

    Amendment has been made to Income Tax Ordinance, 2001 under which Section 111 shall not apply to the first purchaser of a building or a unit and capital investment made in a new project in the form of money or land.

    Section 111 of the Ordinance deals with concealed or undeclared money whereas harsh penalties under the ordinance have been outlined for undeclared money.

    According to the sub-Section 3 of Tax Laws (Amendment) Ordinance No.1 of 2020, the provisions of Section 111 shall not apply to capital investment made in a new project in the form of money or land, subject to following conditions, namely:

    (a) if the investment is made by a builder or developer being an individual –

    (i) in the form of money, such builder or developer shall open a new bank account and deposit such amount in it on or before the 31st day of December 2020; or

    (ii) in the form of land, such builder or developer shall have the ownership title of the land at the time of commencement of the Tax Laws (Amendment) Ordinance, 2020;

    (b) if the investment is made by a person in a project through a company or an association of persons;

    (i) such company or association of persons shall be single object (builder or developer) company or association of persons registered under the Companies Act, 2017 or the Partnership Act, 1932, as the case may be, after the date of commencement of the Tax Laws (Amendment) Ordinance, 2020 and on or before the 31st day of December, 2020; and

    (ii) the person shall be a member or shareholder of such association of persons or company, as the case may be;

    And if the capital investment is made,

    (i) in the form of money, such amount shall be invested through a crossed banking instrument deposited in the bank account of such association of persons or company, as the case may be, on o before the 31st day of December, 2020; or

    (ii) in the form of land, such land shall be transferred to such association of persons or company, as the case may be, on or before the 31st day of December 2020;

    Provided that the person shall have the ownership title of the land at the time of commencement of the Tax Laws (Amendment) Ordinance, 2020;

    (c) a person making an investment under the ordinance shall submit a prescribed form on IRIS web portal;

    (d) a person making an investment shall be wholly utilized in project; and

    (e) completion of the project shall be certified in the following manner, namely:

    (i) in case of a builder, the map approving authority or NESPAK shall certify that grey structure as per the approved map has been completed by the builder on or before the 30th day of September 2022; and

    (ii) in case of a developer

    (A) the map approving authority or NESPAK shall certify that landscaping has been completed on or before the 30th day of September 2022;

    (B) a firm of chartered accountants having an ICAP QCR rating of ‘satisfactory’, notified by the Board for this purpose, shall certify that at least 50 percent of the plots have been booked for sale and at least 40 percent of the sale proceeds have been received by the 30th day of September, 2020; and

    (C) at least 50 percent of the roads have been laid up to sub-grade level as certified by the approving authority or NESPAK.

    The sub-Section 4 of the latest ordinance said that the provisions of Section 111 shall also not apply to-

    (a) the first purchaser of a building or a unit of the building purchased from the builder in respect of purchase price of the building or unit of the building subject to the following conditions, namely:

    (i) full payment is made through a crossed banking instrument to the builder during a period starting from the date of registration of the project with the board under this section and ending on the 30th day of September 2022, in case the purchase is from a new project; and

    (ii) full or balance amount of payment is made through a crossed banking instrument to the builder during a period starting from the date of registration of the project with the board under this section and ending on the 30th day of September 2022, in case the purchase is from an existing incomplete project; and

    (b) the purchaser of a plot who intends to construct a building thereon, if

    (i) the purchase is made on or before the 31st day of December 2020;

    (ii) the full payment is made on or before the 31st day of December, 2020 through a crossed banking instrument;

    (iii) construction of such plot is commenced on or before the 31st day of December 2020.

    (iv) such construction is completed on or before the 30th day of September 2022; and

    (v) the person registers himself with the board on the online IRIS web portal.

    The sub-Section 5 of the latest ordinance said that sub-Section (3) or (4) apply, the value or price of land or building, as the case may be, shall be higher of clause (a) or (b) below:

    (a) 130 percent of the fair market value as determined by the board under sub-section (4) of Section 68; or

    (b) at the option of the person making investment, the lower of the values as determined by at least two independent valuers from the list of valuers approved by the State Bank of Pakistan.

    Sub-Section 6 of the ordinance stated that Sub-Section (3) and (4) shall not apply to –

    (a) holder of any public office as defined in the Voluntary Declaration of Domestic Assets Act, 2018 or his benamidar as defined in the Benami Transactions (Prohibition) Act, 2017 or his spouse or dependents;

    (b) a public listed company, a real estate investment trust or a company whose income is exempt under any provision of the ordinance; or

    (c) any proceeds derived from the commission of a criminal offence including the crimes of money laundering extortion or terror financing but excluding the offences under the ordinance.

  • FBR promotes 35 DEOs to MIS Officer BS-16

    FBR promotes 35 DEOs to MIS Officer BS-16

    ISLAMABAD: Federal Board of Revenue (FBR) on Monday notified promotions of 35 Data Entry Operators (BS-14) to the post of MIS Officer (BS-16) on regular basis with immediate effect.

    The following officers have been promoted to the post of MIS Officers:

    01. Agha Zafar Ullah, Regional Tax Office, Sukkur

    02. M Latif Awan, Data Processing Center (Income Tax), Karachi.

    03. Tanveer Ahmed Awan, Large Taxpayers Unit, Karachi.

    04. Mirza Adnan Baig, Corporate Regional Tax Office, Karachi.

    05. Amanullah Khan, Directorate of Intelligence and Investigation (Inland Revenue), Lahore.

    06. Muhammad Asim Bashir, Large Taxpayers Unit, Lahore.

    07. Syed Hassan Riaz, Data Processing Center (Income Tax), Lahore.

    08. Waseem Shafiq, Data Processing Center (Income Tax), Karachi.

    09. Kamran Sabir, Regional Tax Office, Quetta.

    10. Irshad Hussain, Regional Tax Office-III, Karachi.

    11. Muhammad Ayub, Data Processing Center (Income Tax), Karachi.

    12. Muhammad Mukarram, Data Processing Center (Income Tax), Karachi.

    13. Nahid Sultana, Data Processing Center (Income Tax), Karachi.

    14. Rashid Ishaq, Regional Tax Office, Faisalabad.

    15. Mst. Abida Aslam Rathore, Directorate of Research and Statistics, Islamabad.

    16. Muhammad Riaz, Corporate Regional Tax Office, Lahore.

    17. Muhammad Nisar, Data Processing Unit (Income Tax), Gujranwala.

    18. Danish Muhammad Khan, Large Taxpayers Unit-II, Karachi.

    19. Tasadduq Hussain, Regional Tax Office, Islamabad.

    20. Rashid Maqbool, Large Taxpayers Unit, Lahore.

    21. Furqan Khan, Large Taxpayers Unit, Lahore.

    22. Asif Mehmood, Data Processing Center (Income Tax), Lahore.

    23. Nisar Rasheed, Data Processing Center (Income Tax), Lahore.

    24. Agha Mehboob Abbas, Regional Tax Office, Rawalpindi.

    25. Kh, Altaf ur Rehman, Data Processing Unit (Income Tax), Multan.

    26. Yaseen Panhwar, Regional Tax Office, Hyderabad.

    27. Shah Qaiser Sheikh, Regional Tax Office-II, Lahore.

    28. Faiz Hussain Qureshi, Corporate Regional Tax Office, Lahore.

    29. Tariq Javed Khan Niazi, Corporate Regional Tax Office, Lahore.

    30. Muhammad Sohail, Large Taxpayers Unit, Lahore.

    31. Javed Rashid, Corporate Regional Tax Office, Lahore.

    32. Abdul Waheed, Large Taxpayers Unit, Lahore.

    33. Tahir Ali Khan, Directorate of Intelligence and Investigation (Inland Revenue), Lahore.

    34. Khalid Mehmood S/o Muhammad Qasim, Directorate of Intelligence and Investigation (Inland Revenue), Lahore.

    35. Tajamal Abbas, Reginoal Tax Office, Faisalabad.

    The FBR said that the officers would be on probation for a period of one year, extendable for a further period not exceeding one year, provided that if no order is issued by the day following the termination of probationary period, the appointment shall be deemed to be held until further orders.

    The officers already drawing performance allowance equal to 100 percent of the basic pay will continue to draw the same on their promotion.

    The FBR congratulates the officers on their promotion.

  • FBR collects Rs71.21 billion as regulatory duty in last fiscal year

    FBR collects Rs71.21 billion as regulatory duty in last fiscal year

    KARACHI: The customs authorities have collected Rs71.21 billion as regulatory duty during fiscal year 2018/2019, said Federal Board of Revenue (FBR) in a report released recently.

    The collection of regulatory duty increased by 12 percent to Rs71.21 billion in fiscal year 2018/2019 as compared with Rs63.58 billion in the preceding fiscal year.

    The share of regulatory duty in total customs collection in fiscal year 2018/2019 was 10.36 percent. This ratio was at 10.45 percent to the total customs duty in fiscal year 2017/2018.

    The total collection of customs duty was Rs685.57 billion in fiscal year 2018/2019 as compared with Rs608.37 billion in the preceding fiscal year, showing increase of 12.7 percent.

    The collection of customs duty also includes warehouse surcharge, regulatory duty, export development surcharge and export duties.

    The customs authorities collected Rs1.06 billion as warehouse surcharge in fiscal year 2018/2019 as compared with Rs853 million.

    An amount of Rs7.69 billion as export development surcharge during fiscal year 2018/2019 as compared with Rs6.13 billion in the preceding fiscal year.

    Besides, the authorities also collected Rs816 million as export duties during fiscal year 2018/2019 as compared with Rs859 million in the fiscal year 2017/2018.

  • Tax to GDP ratio to ease at 11pc as COVID19 losses estimated at Rs1,023bn

    Tax to GDP ratio to ease at 11pc as COVID19 losses estimated at Rs1,023bn

    ISLAMABAD: Pakistan’s tax to GDP ratio likely fall to 11 percent as losses due to coronavirus lockdown on tax revenue has been estimated at around Rs1,023 billion in current fiscal year.

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  • FBR extends date for sales tax payment, return for March

    FBR extends date for sales tax payment, return for March

    ISLAMABAD: Federal Board of Revenue (FBR) has extended the date for payment and filing sales tax monthly return for the month of March 2020.

    In a circular issued on Saturday, the FBR extended the last date for making payment of sales tax up to April 27, 2020, which was due on April 15, 2020.

    Similarly, the FBR extended the last date for filing sales tax monthly return up to April 30, 2020, which was due on April 18, 2020.

    The FBR facilitated the taxpayers in making sales tax payment and filing return due to lockdown to contain coronavirus.

    The government extended the lockdown period up to April 30, 2020 in order to contain the outbreak of coronavirus pandemic.

  • Tax collection from phone services jumps up 630 percent

    Tax collection from phone services jumps up 630 percent

    ISLAMABAD: The collection of withholding tax from phone subscribers registered a phenomenal increase of 630 percent to Rs27 billion during first half of the current fiscal year, according to data made available to PkRevenue.com

    The sources in Federal Board of Revenue (FBR) told that the restoration of withholding tax on phone usage by the Supreme Court of Pakistan (SBP) helped the tax authorities to generate substantial amount during the period under review.

    The data revealed that the FBR collected withholding tax to the tune of Rs27 billion during first six months (July – December) 2019/2020 as compared with Rs3.7 billion collection in the corresponding period of the last fiscal year.

    The FBR collects withholding tax on telephone usage under Section 236 of Income Tax Ordinance, 2001 from telephone subscribers and internet.

    The tax rate is zero percent on monthly bill up to Rs1,000. However the bill exceeding Rs1,000 shall liable to tax rate at 10 percent.

    In case subscriber of internet, mobile telephone and pre-paid internet or telephone card the tax rate shall be 12.5 percent of the amount of bill or sales price of internet pre-paid card or prepaid telephone card or sale of units through any electronic medium or whatever form.

    The phone companies preparing bills or selling prepaid cards are responsible to collect withholding tax on behalf of the FBR from telephone subscribers, internet subscribers, purchaser of internet prepaid cards.

    The withholding tax collected from phone usage is adjustable against the taxpayers’ liability.

    The FBR incurred a loss of Rs55 billion in 2018/2019 due to suspension of withholding tax on telecommunication services by the Supreme Court of Pakistan.

  • FBR amends list for exemption on equipment for coronavirus prevention

    FBR amends list for exemption on equipment for coronavirus prevention

    In a continued effort to combat the COVID-19 pandemic, the Federal Board of Revenue (FBR) has issued an updated list of duty and tax-exempt items crucial for the prevention and control of the virus.

    (more…)
  • FBR exempts withholding tax on commission for Ehsaas Program

    FBR exempts withholding tax on commission for Ehsaas Program

    ISLAMABAD: Federal Board of Revenue (FBR) has exempted the withholding tax on commission agent for disbursement of Ehsaas Emergency Program.

    The FBR issued SRO 315(I)/2020 dated April 16, 2020 to make amendment to Second Schedule of Income Tax Ordinance, 2001.

    According to the amendment, a new clause 102A inserted to Part IV of the Second Schedule, which stated: “The provisions of Section 233 shall not apply to commission received by a retail branchless banking agent on any amount disbursed by the Ehsaas Emergency Cash Transfer Program for the period commencing on the date of issuance of this notification and ending on the 30th day of June, 2020.”

    The Section 233 of the Income Tax Ordinance, 2001 explains application of withholding tax on brokerage and commission.

    Where any payment on account of brokerage or commission is made by the Federal Government, a Provincial Government, a Local Government, a company or an association of persons constituted by, or under any law (hereinafter called the “principal”) to a person (hereinafter called the “agent”), the principal shall deduct advance tax at the rate specified in Division II of Part IV of the First Schedule from such payment.

    If the agent retains Commission or brokerage from any amount remitted by him to the principal, he shall be deemed to have been paid the commission or brokerage by the principal and the principal shall collect advance tax from the agent.

  • Tax collection from cash withdrawal falls by 52 percent

    Tax collection from cash withdrawal falls by 52 percent

    ISLAMABAD: The collection of withholding income tax from cash withdrawal from banks fell by 52 percent during first half of the current fiscal year as the government withdrew the levy on active taxpayers.

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  • Tax collection from salary income surges by 75 percent

    Tax collection from salary income surges by 75 percent

    ISLAMABAD: Tax collection from salary increase has sharply increased by 75 percent during first half (July – December) of current fiscal year 2019/2020 owing to changes brought in tax rates through Finance Act, 2019.

    According to official data, the Federal Board of Revenue (FBR) collected Rs57.5 billion from salary income during July – December 2019/2020 as compared with Rs32.8 billion in the corresponding period of the last fiscal year.

    It is pertinent to mention here that the threshold income has been enhanced to Rs600,000 for calculation of income tax for tax year 2020 as compared with Rs400,000 prevailed during tax year 2019.

    The FBR issued withholding tax card for tax year 2019/2020 effective from July 01, 2019 under which every employer paying salary to employees above threshold income shall deduct withholding tax.

    The FBR said that every person responsible for paying salary to an employee shall deduct tax from the amount paid under Section 149 of Income Tax Ordinance, 2001.

    As per Finance Act, 2019, the provisions of newly inserted 10th schedule of the Income Tax Ordinance, 2001 shall not apply on tax deducted under section 149. Under the Tenth Schedule the withholding tax so collected shall be increased by 100 percent in case of persons not appearing on the Active Taxpayers List (ATL).

    As per Finance Act, 2019, the salary slabs as well as tax rates have been revised with effect from 01.07.2019. As such all withholding tax agents disbursing salary are required to implement the revised tax rates from the same date.

    Following are the salary slabs and rates on annual salary income:

    TABLE

    Salary SlabsTax Rates on salary slabs
    1. Where taxable income does not exceed Rs. 600,000.0 percent
    2. Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000.5% of the amount exceeding Rs. 600,000
    3. Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 1,800,000.Rs. 30,000 plus 10% of the amount exceeding Rs. 1,200,000.
    4. Where taxable income exceeds Rs. 1,800,000 but does not exceed Rs. 2,500,000.Rs. 90,000 plus 15% of the amount exceeding Rs. 1,800,000
    5. Where taxable income exceeds Rs. 2,500,000 but does not exceed Rs. 3,500,000Rs. 195,000 plus 17.5% of the amount exceeding Rs. 2,500,000
    6. Where taxable income exceeds Rs. 3,500,000 but does not exceed Rs. 5,000,000Rs. 370,000 plus 20% of the amount exceeding Rs. 3,500,000
    7. Where taxable income exceeds Rs. 5,000,000 but does not exceed Rs. 8,000,000Rs. 670,000 plus 22.5% of the amount exceeding Rs. 5,000,000
    8. Where taxable income exceeds Rs. 8,000,000 but does not exceed Rs. 12,000,000Rs.1,345,000 plus 25% of the amount exceeding Rs. 8,000,000
    9. Where taxable income exceeds  Rs. 12,000,000 but does not exceed Rs.30,000,000Rs. 2,345,000 plus 27.5% of the amount exceeding Rs. 12,000,000
    10. Where taxable income exceeds Rs. 30,000,000 but does not exceed Rs.50,000,000Rs. 7,295,000 plus 30% of the amount exceeding Rs. 30,000,000
    11. Where taxable income exceeds Rs. 50,000,000 but does not exceed Rs.75,000,000Rs. 13,295,000 plus 32.5% of the amount exceeding Rs. 50,000,000
    12. Where taxable income exceeds Rs.75,000,000Rs. 21,420,000 plus 35% of the amount exceeding Rs 75,000,000″;

    The FBR said that every person responsible for making payment for directorship fee or fee for attending board meeting or such fee by whatever name called under Section 149(3) of Income Tax Ordinance, 2001 shall collect 20 percent of gross amount paid.