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 issues draft income tax rules for small shopkeepers

ISLAMABAD: Federal Board of Revenue (FBR) on Thursday issued draft rules for small shopkeepers to pay income tax and file annual returns.

The FBR defined ‘Small Shopkeeper’ as an individual where the business is carried out at a premises having covered area less than 300 square feet but does not include a shopkeeper if he is engaged in the activity of a jeweler, wholesale, warehouse, real estate agent, builder and developer, doctor, lawyer, chartered accountant or any other category specified by the Board, a retailer operating as a unit of a national or international chain of stores, a retailer operating in an air-conditioned shopping mall, plaza or center, a retailer who has a credit or debit card machine, any person whose cumulative electricity bill exceeds Rs.300,000 in the immediately preceding twelve months; and any person covered under section 99C of the Income Tax Ordinance, 2001.

Tax Rate.—The tax payable on profits and gains of a shopkeeper on his income chargeable under shall, higher of,-

(a) two percent of ‘turnover’ as defined in section 113 of the Ordinance; or

(b) the amount of tax as set out in the following Table:—

Table

S. No	Area and premises	Rate of tax
	Tax Year 2019	Tax Year 2020
(1)	(2)	(3)	(4)
1.	If the shop is located in area specified as category A and the shop premises in which the business activity carried out does not exceed 150 square feet	Rs. 35,000	Rs. 40,000
2.	If the shop is located in area specified as category A and the shop premises in which the business activity is carried out exceeds 150 square feet but does not exceed 300 square feet	Rs. 40,000	Rs. 50,000
3.	If the shop is located at any place other than category Aand the shop premises in which the business activity is carried out does not exceed 150 square feet	Rs. 20,000	Rs. 25,000
4.	If the shop is located at any place other than category A and the shop premises in which the business activity is carried out exceeds 150 square feet but does not exceed 300 square feet	Rs. 25,000	Rs. 30,000

For the purpose of above mentioned table, category A means an area where value of shop exceeds Rs.10, 000 per square foot as per FBR valuation table or DC rate whichever is higher as applicable.

Manner of Payment of Tax.—

(1) In case if a person opts a fixed tax regime the amount referred to in Rules 3 shall be paid in the manner laid down under Rule 9.

(2) In other case the tax under rule 3 shall be payable in two equal installments to the Commissioner—

(a) in respect of first installment on or before the 30th day of September; and

(b) in respect of second installment on or before the 31st day of December;

Provided that for tax year 2019 the shopkeeper shall have the option of paying the tax under rule 3 along with return.

Where the person opts to pay tax and furnish return under these rules, no deduction for expense, withholding credit or refund —

There shall be no audit or examination of such shopkeeper, unless so specified by the Board.

The shopkeeper shall furnish return in Form ‘A’ specified in Schedule to these rules.

The tax under rule 3 shall be paid in the State Bank of Pakistan, or authorized branches of banks and evidence in the form of a copy of computerized tax payment receipt (CPR) shall be furnished to the Commissioner by the due date as mentioned in rule 4.

On receipt of evidence of payment of tax installment, the shopkeeper shall be issued a sticker which shall be displayed by the shopkeeper at a prominent place in the business premises.

Where these rules apply—

(a) the shopkeeper shall not be required to withhold tax from any person as required under the Ordinance;

(b) the shopkeeper shall furnish return for the tax year by the due date or extended due date as specified under the Ordinance;

(c) the shopkeeper shall not be required to file wealth statement under the provision of sub-section (2) of section 116 of the Ordinance for the tax year for which return qualifies under these rules.

Where the shopkeeper has furnished return to the Commissioner under these rules—

(1) The Commissioner shall be treated to have made an assessment of the taxable income and tax payable on the tax due thereon for the tax year under the provisions of section 120 of the Ordinance;

(2) The return furnished shall be treated to be an assessment order issued by the Commissioner on the day the return was furnished under these rules and provision of section 120 of the Ordinance;

The provisions of these rules shall not apply to the shopkeeper—

(1) who fails to pay tax installments under rule 4;

(2) who fails to furnish a return for a tax year within the due date as extended period as specified under the Ordinance after having furnished a return once for any tax year under these rules provided that the shopkeeper may opt to furnish return under these rules after two tax years immediately following the tax year he failed to furnish return.

No action against any shopkeeper shall be undertaken unless the matter is taken up with the association of traders concerned after seeking approval from FBR.

The Federal Government may, from time to time, by notification in the official Gazette, make amendment in these Rules

Persons convicted under Control of Narcotics Substances Act, 1997 (XXV of 1997), Anti-Terrorism Act, 1997 (XXVII of 1997) and Anti-Money Laundering Act, 2010 (VII of 2010).

August 1, 2019

Customers advised to pay sales tax only to registered suppliers

ISLAMABAD: Federal Board of Revenue (FBR) on Thursday said that sales tax can only be recovered from customer if the supplier is registered for sales tax purpose.

The FBR issued Sales Tax Circular No. 02 of 2019 and said that it was observed in many cases, suppliers of goods and services were charging sales tax on invoices/ receipts without identifying their sales tax registration number (STRN) on the ‘Invoices/Receipts’ issued to the customers. At times, National Tax Number (NTN) is indicated on invoices, to exhibit that the supplier is registered.

The FBR suggested customers to ask for invoices/receipts having STRN on the invoices/receipts on purchase of goods and services. “Sales tax can only be recovered from the customer if the supplier is registered for sales tax purposes, and reflects the STRN on the invoice/receipt issued to the customer.”

In other cases, the supplier is not entitled to recover sales tax from the customers. “Customers should beware of the same.”

The FBR said many suppliers were charging sales tax from customers without getting them registered under the sales tax regime. This practice is against the law and is liable to penal action. “This practice leads to increase in prices and undue enrichment of sellers without any deposit of tax with the government,” the FBR said.

Customers are suggested to seek invoice/receipts from suppliers with STRN on the invoices/receipts issued, if sales tax is charged on their purchases.

The FBR further explained that buyer is not required to provide his NIC in case of purchases from a person not registered for sales tax.

The FBR also clarified that in case of purchase of third schedule items, which are subject to sales tax on the basis of retail price and on which retail price along with sales tax is legibly and indelibly printed or embossed, the sales tax on the same is deposited by the manufacturer or importer. “In case of such items, STRN may not be required if the same are purchased from a retailer,” the FBR said.

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FBR notifies revision in exemption regime under sales tax laws

August 1, 2019
FBR issues draft rules for obtaining business license

ISLAMABAD: Federal Board of Revenue (FBR) on Thursday issued draft rules for obtaining license which is mandatory for any business, profession or vocation to display.

According to draft amendment, the FBR proposed new rules, after Chapter XIII, the following new Chapter to Income Tax Rules, 2002 shall be inserted, namely:—

“Chapter XIIIA

Obtaining and Issuance of Business License

83A. The rules in this Chapter apply for the purposes of section 181A which provides for business license scheme.

83B. Definitions.— in these rules, unless there is anything repugnant to the subject or context,—

(a) “applicant” means a person who files application for issuance of business license;

(b) “Iris” means the application software on the web portal of Federal Board of Revenue for the purposes including application for business license;

(c) “service provider” means any person whose services to provide electronic data entry into Iris or any other web based application software, bio-metric verification and delivering the print out of the business license to the applicant for the purposes of these rules, has been hired by the Federal Board of Revenue.

83C. Application for and issuance of business license.— (1) Subject to sub-rule (4), any person engaged in any business, profession or vocation, shall apply to the Federal Board of Revenue for issuance of business license in the Form specified in the schedule.

(2) Where the applicant is having a cell phone number, issued by any mobile phone company and is having access to the internet facility, he shall file application form on the Iris or any software application developed by Federal Board of Revenue for the purposes of these rules. The system generated business license issued to the applicant shall be emailed to the applicant.

(3) Where the applicant is not having any cell phone number issued by any mobile phone company or not having access to internet facility, he shall provide the particulars to the service provider or the personnel in a Kiosk established by a Regional Tax Office, for online filing of the form, and the service provider or the personnel in the Kiosk, as the case may be, shall—

(i) verify particulars of the form filled in;

(ii) complete bio-metric verification of the applicant; and

(iii) give system generated print out of the business license to the applicant;

(4) Where a person’s name is appearing in the active taxpayers’ list, he shall be treated to have filed application and the system generated business license shall be emailed to his email address registered in Iris.

83D. Display of the business license.— (1) Every person who has been issued a business license under these rules, shall display the said license at every place of business of the person.

83E. No liability on holding a business license.— Where a person has been issued a business license, he shall not be liable to payment of any tax on account of holding a business license unless such person is otherwise liable to payment of tax under any other provisions of the Income Tax Ordinance, 2001.

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FBR streamlines anti-benami regime to stop white collar crimes

August 1, 2019
Threshold amount to purchase immovable properties removed for withholding tax collection: FBR

ISLAMABAD: Federal Board of Revenue (FBR) has removed threshold amount to purchase of immovable properties for collection of withholding tax.

The FBR issued Income Tax Circular No. 09 dated July 30, 2019 and said that through the Finance Act, 2019, the rate of tax on purchase of immovable property under Section 236K of Income Tax Ordinance, 2001 has been reduced to 1 percent from 2 percent.

Prior to the Finance Act, 2019, no tax was collected under Section 236K on purchase of property where the value of property up to Rs4 million.

“Through the Finance Act, 2019, the threshold of Rs4 million for collection of tax has been removed. Now tax on purchase of property will be collected on all transactions irrespective of the value of immovable property,” the FBR said.

The FBR said that tax under section 236C is collected from the seller or transfer at the rate of one percent of the gross amount of consideration received.

Prior to the Finance Act 2019, this tax was not collected if the property was held for a period exceeding three years.

Through the Finance Act, 2019, the period of three years has been extended to five years which means that tax under section 236C shall be collected if the immovable property is held for a period up to five years.

The FBR further explained that as per section 236W read with clause (c) of sub-section (4) of Section 111, every person responsible for registering, recording or attesting transfer of any immovable property was required to collect tax at the rate of 3 percent of the difference between the FBR value of property and the value recorded by the authority registering or attesting the transfer in cases where FBR value was greater than the recorded value.

So by paying three percent on the difference, the purchaser was not required to explain the source of difference of amount between FBR value and the recorded value.

Through Finance Act, 2019, section 236W as well as clause (c) of sub-section (4) of Section 111 have been omitted. Consequently, the purchasers are not required to explain the source of investment of property up to the FBR value of property whereas previously such purchasers were required to explain the source of investment to the extent of recorded value of property.

July 31, 2019

FBR streamlines anti-benami regime to stop white collar crimes

ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday issued official note to streamline Anti-Benami Regime to stop white collar crimes.

The FBR said that Benami Transactions, entailing the phenomenon of Benami moveable and immoveable properties, Bank A/Cs, Luxury Vehicles, off shore investments and stocks & shares is one of the biggest economic and financial threats, currently camouflaging the rampant corruption in our society, deadly confronting Pakistan’s taxation system and practically compromising the economic viability of the country.

Due to non existence of a special Law and Rules on Benami all Anti-corruption agencies have so far failed in tracing and documenting the real/beneficial owners and criminals went scot free.

In order to combat the menace of Benami and take the spirit of accountability forward Federal Government has operationalized Benami Transaction (Prohibition), Act, 2017, which was dormant since February, 2017.

Federal Board of Revenue has been assigned the administration and implementation of this new stream of Financial Crime Investigation & Enforcement.

This office order is aimed at streamlining of newly introduced Anti-Benami Regime in Pakistan.

I. Organizational Framework: Anti Benami Regime Pakistan.

FBR, as the parent/administering department envisages two distinct streams of functions for this White Collar Crime Investigation Agency: independent Authorities and supporting Administrative Oversight.

Both streams shall co-exist, though mutually exclusive yet complementing each other. For the legal functions, to be conducted by different Anti-Benami Authorities, their operational independence is fully protected under Benami Transaction (Prohibition) Act, 2017.

However FBR’s administrative facilitation, financial support and organizational oversight are essential for sustainable field operations, development and strengthening of this newly launched regime.

Authorities

Core Functions

Support Functions

Initiating Officer (BS-18)

-Initiation of Anti-Benami Proceedings

-Attachment of Benami Properties -Inquiries and Investigations

-Filing of Reference to Adjudication Authority.

-Filing of Appeals

-Enforcement of various provisions of said Act.

-Examination and Analysis of

complaints and references by

different agencies

– Development of Research &

Analysis Cells

-Data Archiving

-Services of Notices

-Litigation Management

Approving Authority (BS-20)

-Highest Legal Authority at Anti-Benami Field formations

-Supervisory/Administrative authority at Benami Zones

-Granting approval of all major legal and Enforcement functions

-Inherent powers u/s 16

-Confiscation of benami properties

-Administrative and Financial head of Anti-Benami Zone

-Focal office for all correspondence with FBR and other Anti-Benami authorities

-Addressing genuine grievances and complaints

-Performance Management and Reporting

-Reposing officer in the cases of Initiating officers and Administrators

-Linkages with FBR portal and other economic & financial data bases

Administrator (BS-17)

-Management of Attached properties -Management of Confiscated properties

-Possession of benami properties

-Confiscation of benami properties

-Disposal of Confiscated properties

-Ware Housing in the cases of attached/confiscated movable properties

-Intelligence & Vigilance function of benami Zones

-Spear heading all enforcement activities

-Maintenance of Discipline and motivation in field workforce

Adjudicating Authorities (BS-21/22)

-Adjudication of References filed by Initiating Officers

-Inquiries and investigation

-Attachment powers

-Statutory powers to add or delete any person arrayed as accused or property labeled as benami

– Passing Confiscation Order

-Constitution of Adjudication benches

-Administration of Officers and

Employees of Adjudication Authority

-Advice to the Federal Government

on Adjudication related matters

-Development of Case Studies

-Critical References filed by Benami Zones

-Administration of justice

-Periodical Review of Law, Rules and patterns of crime

A. Authorities: Benami Transaction (Prohibition) Act, 2017 provides detailed description and powers & functions of various authorities. FBR has already notified the jurisdiction and appointment of field authorities at Islamabad, Lahore and Karachi.

In addition to their statutory functions, FBR deems it necessary to assigns field Benami authorities some support functions as well.

These support functions would help in realizing the desired results of this legislation and seamless implementation of this new regime.

B. Administrative Oversight: Director General-Anti Benami Initiative (DG- ABI)

In order to facilitate the Authorities and to ensure efficient and effective implementation of Anti-Benami law the office of DG-ABI is being raised to ensure smooth and effective implementation and enforcement of Anti-Benami Act, 2017. Without any interference in their respective legal domains, this administrative structure would provide the following support to Anti-Benami Zones.

i) DG-ABI would act as FBR’s focal office for proper implementation of Benami Transaction (Prohibition) Act, 2017. DG-ABI would act as a bridge between Anti-Benami Zones and FBR, between Zones and Adjudication Authorities and among all the Anti-Benami Zones as well.

ii) Establishment of Administrative hierarchy for the newly created Anti-benami Zones at Islamabad, Lahore and Karachi.

iii) Logistic Support, Financial Back up & autonomy and capacity building for Anti-Benami Zones.

iv) Development of uniform operational SOPs for transparent functioning of field authorities.

v) Contact point for all external agencies interacting with FBR in Benami related matters. Receipt, analysis and dissemination of benami related complaints, data, information and reference from all external Quarters.

vi) Development of linkages between Anti-benami authorities and FBR’s portal and external Data Bases. Central Data Bank on Benami.

vii) Quantitative Performance Evaluation of Anti-Benami Zones.

Qualitative Evaluation shall be made only after obtaining input from the concerned Adjudication Authority.

viii) Addressing all jurisdiction related issues in the light of FBR’s relevant notifications.

ix) Recommendations for review and amendments in Law, Rules and Procedure, covering Anti-Benami Regime

x) Personnel Management and Litigation

II. Directorate General-ABI: The Organizational structure

i) Directorate General-ABI would comprise a Director General, Director HQs and three Commissioners, Anti Benami Zones at Islamabad, Lahore and Karachi, responsible for their notified jurisdictions.

ii) Directorate General-ABI and its formations would be manned by officers of IRS and staffed by IR Department

III. Reporting Mechanism
i) Administrators and Initiating Officers shall report to their respective Commissioners, Anti-Benami Zones.

ii) Commissioners, Anti Benami Zones would be independent in their Legal jurisdictions. For all administrative matters they will be reporting to DG-ABI Islamabad.

iii) DG-ABI would report to the National Coordinator for implementation of Benami Transactions (Prohibition) Act, 2017.

July 31, 2019

FBR extends date for filing withholding statements to August 20

ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday extended the date for filing withholding statements by 20 days to August 20, 2019 from July 31, 2019.

In this regard the FBR issued Income Tax Circular No. 10 to allow extension for filing withholding statements under Section 165 of Income Tax Ordinance, 2001.

July 31, 2019
FBR promotes 30 appraising officers of customs department

ISLAMABAD: Federal Board of Revenue (FBR) has promoted 30 appraising officers to the post of principal appraisers (BS-16) with immediate effect and until further orders, a notification said on Wednesday.

According to notification made available to PkRevenue.com, the following Appraising Officer of Pakistan Customs Department are promoted to the post of Principal Appraiser (BS-16)with immediate effect and until further orders:

Following officers have been promoted to the post of principal officers:

01. Junaid Malik, MCC, Appraisement (East), Karachi

02. Shahrukh Akhlaq Siddiquie, MCC, Appraisement (East), Karach

03. MuhammadNazir Khan, MCC, Gilgit-Baltistan

04. Syed Masoom Raza, MCC, (JIAP), Karachi

05. MuhammadNadeem Butt, MCC, Appraisement (West), Karachi

06. Ghulam Yasin Sabri, MCC, PMBQ, Karachi

07. Altaf Ali Chandio, MCC, Preventive, Karachi

08. Ashique Ali Memon, MCC, Appraisement (East), Karachi

09. Mohammad Yaqoob, MCC, Appraisement (West), Karachi

10. Vaqas Jilani, MCC, Preventive, Lahore

11. Malik Naveed Anwar, Dte. of Post Clearance Audit, Lahore

12. Adnan Khurshid Cheema, MCC, Appraisement (East), Karachi

13. Azeem Manzoor, MCC, Islamabad (He will actualize promotion on return from Ex-Pakistan leave).

14. Saifuddin Khan, MCC, Appraisement, Lahore

15. Muhammad Iftikhar Hussain, MCC, Appraisement (East), Karachi

16. Tariq Aziz S/o Abdul Aziz, MCC, Appraisement (West), Karachi

17. Ms. Nudrat Nawaz, Dte.Gen. of PCA, Islamabad

18. Amir Nasir Ali Khan, MCC, Appraisement (East), Karachi

19. Sarfraz Bangulzai, MCC, Appraisement (East), Karachi

20. Amjad Iqbal, MCC, Appraisement (West), Karachi

21. Raja Waseem Ahmad, MCC, PMBQ, Karachi

22. Zafar Shabbir, MCC, Appraisement (East), Karachi

23. Imtiaz Hussain Khan, Dte. Gen of Valuation, Karachi

24. Farooq Ahmad, MCC, Appraisement (West), Karachi

25. Abdul Hameed, MCC, (Preventive), Lahore

26. Muhammad Afzal, MCC, (Preventive), Lahore

27. Tabasum Shahzad, Dte. of Post Clearance Audit, Lahore

28. Muhammad Ejaz Cheema,Dte. of Intelligence & Investigation (Customs), Lahore

29. Muhammad Yousaf Ansari, MCC, Appraisement, Lahore

30. Ghulam Nabi Zafar, Dte. of Internal Audit(Customs), Lahore

The FBR said that their promotion will take effect from the date of their joining, subject to the condition that no disciplinary proceedings/enquiry is pending against them.

The officers will be on probation for a period of one year, extendable for 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 deem to be held until further order

The officers already drawing Performance Allowance equal to 100 percent of basic pay will continue to draw it on their promotion.

July 31, 2019
Persons not appearing in ATL will pay 100 percent increased withholding tax rate: FBR

KARACHI: Persons whose names are not appearing in the Active Taxpayers List (ATL) will be subjected to hundred percent increased rate of withholding tax, Federal Board of Revenue (FBR) said in a circular issued to explain changes made in Income Tax Ordinance, 2001 through Finance Act, 2019.

The FBR issued Circular No. 19 of 2019 and said that prior to Finance Act, 2019 a concept of non-filer existed in the Ordinance whereby higher tax rates of withholding were prescribed for persons who were non-filers.

Such non-filers could claim adjustment of the higher tax collected at the time of filing of income tax returns. The aim was to compel the non-filers to file their returns of income. “However, it was observed that the non-filers, even though subjected to higher withholding rates, still had a propensity not to file their returns,” the FBR said.

This proved detrimental to exercise of expansion or tax base. This was due to the absence of an explicit provision specifying a standard procedure for action against such persons.

Through Finance Act, 2019 the concept of non-filers has been done away with and a new concept regarding persons not appearing in the active taxpayers list has been introduced. This concept is a m ore paradigm shift from the erstwhile non-filer higher tax regime in that it not only penalizes those persons not appearing in the ATL but also introduces an effective mechanism for enforcing returns from such persons.

In this regard a new section 100BA to Income Tax Ordinance, 2001 has been introduced which provides that collection or deduction of advance income tax, computation of income and tax payable thereon shall be determined in accordance with the rules in the newly introduced ‘The Tenth Schedule’ which envisages the entire path to be adopted by the Inland Revenue Department to enforce returns from persons who make financial transactions yet choose not to file their returns of income.

The FBR said that the persons whose names are not appearing in the ATL will be subjected to 100 percent increased tax rate.

The FBR further said that where a withholding agent is of the opinion that 100 percent increased tax is not required to be collected on the basis that the person was not required to file return, the withholding agent shall furnish a notice to the commissioner having jurisdiction over withholding agent setting out –

a. The name, CNIC or NTN and address of the person not appearing in the ATL

b. The nature and amount of the transaction on which tax is required to be collected or deducted; and

c. Reason on the basis of which it is considered that the person was not required to file return or statement, as the case may be.

July 31, 2019
Unexplained foreign remittances will be subject to tax: FBR

ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday said that unexplained foreign remittances will be subject to income tax.
(more…)

July 30, 2019
FBR sets 200pc penalty for offshore tax evasion

ISLAMABAD: Federal Board of Revenue (FBR) on Tuesday said the amended income tax law attract 200 percent penalty amount of tax evaded in cases of undeclared offshore assets.

The FBR issued income tax circular to explain the changes brought through Finance Act, 2019 regarding offshore assets and tax evasion.

The FBR said that through the Finance Act, 2019, the term “offshore Assets” has been defined by inserting a new clause (38AA) in section 2 of Income Tax Ordinance, 2001, which includes any movable or immovable assets held, any again, profit or income derived, or any expenditure incurred outside Pakistan.

The term “offshore evader” has been defined by inserting a new clause (38AB) in section 2 and it means a person who owns, possesses, control, or is the beneficial owner of an offshore assets and dos not declare, or under declares or provides inaccurate particulars of such assets to the Commissioners.

Penalty has also been provided in serial No. 22 in sub section (1) of section 182 that where an offshore tax evader is involved in offshore tax evasion in the course of any proceedings under this Ordinance before any Income Tax authority or the appellate tribunal, such person shall pay a penalty of Rs100,000 or an amount equal to 200 percent of the tax sought to be evaded, whichever is higher.

Prosecution for concealment of an offshore assets has been provided by inserting a new section 192B according to which any person who fails to declare an offshore assets to the Commissioner or furnishes inaccurate particulars of an offshore assets and the revenue impact of such concealment or furnishing of inaccurate particulars is ten million rupees or more shall commit an offence punishable on conviction with imprisonment up to three years or with a fine up to Rs. 500,000, or both.

A new sub-section (5) has been added in section 145 as per which the Commissioner may freeze any domestic assets of a person where on the basis of information received from an offshore jurisdiction, the Commissioner has reason to believe the such person who is likely to leave Pakistan may be involved in offshore tax evasion or such person is about to dispose of any assets.

The Commissioner may freeze any domestic assets of the person including any assets beneficially owned by such person for a period of 120 days or till the finalization of proceedings including recovery proceedings and any other proceeding under the Ordinance, whichever is earlier.

The term “offshore enabler” has been defined by inserting a new clause (38AC) in section 2 to include any person who enables, assist, or advises any person to plan, design, arrange or manage a transaction or declaration relating to an offshore assets, which has resulted or may result in tax evasion.

Penalty has been provided in serial no.23 of sub-section (1) of section 182 that where in the course of any transaction or declaration made by a person an enabler has enabled, guided, advised or managed any person to design, arrange or manage that transaction or declaration in such a manner which has resulted or may result in offshore tax evasion in the course of any proceedings under the Ordinance, such person shall pay a penalty of Rs 300,000 or an amount equal to 200 percent of the tax which was sought to be evaded, whichever is higher.

Prosecution for enabling offshore tax evasion has been provided by inserting a new section 195B to the effect that any enabler who enables, guides or advises any person to design, arrange or manage a transaction or declaration in such a manner which results in offshore tax evasion, shall commit an offence punishable on conviction with imprisonment for a term not exceeding seven years or with a fine up to five million rupees or both.

The term “asset move “has been defined by inserting a new clause(5C) in section 2 and it means the transfer of non offshore assets to an unspecified jurisdiction by or an behalf of a person who owns, possesses, controls or is the beneficial owner of such offshore asset for the purpose of tax evasion.

An unspecified jurisdiction means a jurisdiction which has not committed to automatically exchange information under the Common Reporting Standard with Pakistan. The term “specified jurisdiction “has been defined by inserting a new clause (60A) in section 2 and it means any jurisdiction which has committed to automatically exchange information under Common Reporting Standard with Pakistan.

Penalty has also been provided in serial 24 of sub-section (1) of section 182 that any person who is involved in asset move from specified to un-specified territory shall pay a penalty of Rs. 100,000 or an amount equal to 100 percent of the tax, whichever is higher.

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