The government of Pakistan has undertaken a strategic initiative to gradually reduce corporate income tax rates, aiming to bring them down to 25% by the tax year 2023 and onwards.
(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.
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FBR suspends customs officer
ISLAMABAD: Federal Board of Revenue (FBR) has suspended an officer Pakistan Customs Service (PCS) BS-16 while taking disciplinary action against him.
In a notification issued on Monday, the FBR while exercising powers under Government Servants (Efficiency & Discipline) Rules, 1973, suspended Mansab Shah, Inspector, BS-16, Model Customs Collectorate of Preventive, Lahore with immediate effect for a period of three months.
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Tax rates for salary, business individuals
KARACHI: Following are the tax rates for individuals under First Schedule of Income Tax Ordinance, 2001.
The tax rate as updated through Finance Supplementary (Amendment) Act, 2018 to Income Tax Ordinance, 2001, issued by Federal Board of Revenue (FBR).
Rates of tax for individuals
(1) The rates of tax imposed on the taxable income of every individual, not being an individual to which paragraph (1A) of this Division applies, shall be as set out in the following table, namely:—
Table
S. No. Taxable Income Rate of Tax 01 Where the taxable income does not exceed Rs. 400,000 0 percent 02 Where the taxable income exceeds Rs. 400,000 but does not exceed Rs. 800,000 Rs1,000 03 Where the taxable income exceeds Rs. 800,000 but does not exceed Rs. 1,200,000 Rs2,000 04 Where the taxable income exceeds Rs.1,200,000 but does not exceed Rs. 2,400,000 5 percent of the amount exceeding Rs. 1,200,000 05 Where the taxable income exceeds Rs. 2,400,000 but does not exceed Rs. 3,000,000 60,000 + 15 percent of the amount exceeding Rs. 2,400,000 06 Where the taxable income exceeds Rs. 3,000,000 but does not exceed Rs. 4,000,000 150,000 + 20 percent of the amount exceeding Rs. 3,000,000 07 Where the taxable income exceeds Rs. 4,000,000 but does not exceed Rs. 5,000,000 350,000 + 25 percent of the amount exceeding Rs. 4,000,000 08 Where the taxable income exceeds Rs. 5,000,000
600,000 + 29 percent of the amount exceeding Rs. 5,000,000 Provided that where the taxable income exceeds eight hundred thousand rupees the minimum tax payable shall be two thousand rupees.
Salary persons
(1A) Where the income of an individual chargeable under the head “salary” exceeds fifty per cent of his taxable income, the rates of tax to be applied shall be as set out in the following table, namely:—
Table
S.No. Taxable Income Rate of Tax 01 Where the taxable income does not exceed Rs. 400,000 0 percent 02 Where the taxable income exceeds Rs. 400,000 but does not exceed Rs. 800,000 Rs1,000 03 Where the taxable income exceeds Rs. 800,000 but does not exceed Rs. 1,200,000 Rs2,000 04 Where the taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 2,500,000 5 percent of the amount exceeding Rs. 1,200,000 05 Where the taxable income exceeds Rs.2,500,000 but does not exceed Rs. 4,000,000 65,000 + 15 percent of the amount exceeding Rs. 2,500,000 06 Where the taxable income exceeds Rs. 4,000,000 but does not exceed Rs. 8,000,000 290,000 + 20 percent of the amount exceeding Rs. 4,000,000 07 Where the taxable income exceeds Rs. 8,000,000 1,090,000 + 25 percent of the amount exceeding Rs. 8,000,000 Provided that where the taxable income exceeds eight hundred thousand rupees the minimum tax payable shall be two thousand rupees.
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FBR estimates Rs50 billion income tax loss from salary
The Federal Board of Revenue (FBR) has recently presented a comprehensive revenue position to the finance ministry, highlighting an estimated loss of Rs50 billion resulting from the downward revision of tax rates on salary income.
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Income Tax Ordinance 2001: advance tax on paying education fee abroad
KARACHI: Foreign exchange companies are responsible for collecting advance tax on remitting abroad the education related expenses.
The Federal Board of Revenue (FBR) recently updated Income Tax Ordinance, 2001 under which Section 236R explained the advance tax on remitting amount abroad for education expenses.
Section 236R: Collection of advance tax on education related expenses remitted abroad
Sub-Section (1): There shall be collected advance tax at the rate specified in Division XXIIV of Part-IV of the First Schedule on the amount of education related expenses remitted abroad.
Rate of collection of tax under section 236R shall be 5percent of the amount of total education related expenses.
Sub-Section (2): Banks, financial institutions, foreign exchange companies or any other person responsible for remitting foreign currency abroad shall collect advance tax from the payer of education related expenses.
Sub-Section (3): Tax collected under this section shall be adjustable against the income of the person remitting payment of education related expenses.
Sub-Section (4): For the purpose of this section, “education related expenses” includes tuition fee, boarding and lodging expenses, any payment for distant learning to any institution or university in a foreign country and any other expense related or attributable to foreign education.
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FBR holds awareness sessions for online payment of duty, taxes
In a proactive step towards modernizing tax procedures and enhancing ease of doing business, the Federal Board of Revenue (FBR) organized informative sessions in Karachi and Lahore for the business community and tax consultants.
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Advance tax on dealers, commission agents
KARACHI: Every market committee has been required to collect advance tax from dealers, commission agents under income tax laws.
The Federal Board of Revenue (FBR) recently updated Income Tax Ordinance, 2001 under which advance tax is collectable from dealers, commission agents and arhatis under Section 236J.
Section 236J: Advance tax on dealers, commission agents and arhatis etc
Sub-Section (1): Every market committee shall collect advance tax from dealers, commission agents or arhatis, etc. at the rates specified in Division XVII of Part-IV of the First Schedule at the time of issuance or renewal of licences.
The rate of collection of tax under section 236J shall be as follows:
Group Amount of tax
(per annum)Group or Class A: Rs. 10,000 Group or Class B: Rs. 7,500 Group or Class C: Rs. 5,000 Any other category: Rs. 5,000 Sub-Section (2): The advance tax collected under sub-section (1) shall be adjustable.
Sub-Section (4): In this section “market committee” includes any committee or body formed under any provincial or local law made for the purposes of establishing, regulating or organizing agricultural, livestock and other commodity markets.
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SBP directs banks to ensure OTC tax collection by March 27
KARACHI: State Bank of Pakistan (SBP) on Friday directed all commercial banks to ensure receiving payment of duty and taxes through over the counter (OTC) channel.
The SBP said that the finance department through circular on July 17, 2018 made it mandatory for banks to enable their Over-the-Counter (OTC) Channel for collection of taxes and duties.
Complaints are pouring in from different quarters, regarding non-entertaining of tax payment requests through banks’ OTC Channel.
So much so that Federal Board of Revenue (FBR) has formally launched a complaint that PSIDs generated by WeBOC system for payment of customs duty and other taxes especially the levy on Mobile devices are not being entertained, by the bank branches.
In view of the above, all banks were advised vide email dated 15th March 2019 to improve their customer services in facilitating taxpayers with due courtesy.
Despite the above-referred instructions, there is no visible improvement, as complaints from different quarters are still landing with us.
It is therefore advised to share these instructions with all your branches across the country with the advice to ensure meticulous compliance and facilitate the taxpayers in payment of taxes and duties under the I Link’s OTC facility.
The branches shall also prominently display on their respective Notice Boards that “Taxes and Duties are accepted here under the 1Link’s OTC facility”. Further, banks shall also ensure that the branch staff has adequate understanding of the mechanism for collection of taxes and duties under the said facility.
The banks shall inform this department within 3 working days of the date of circular i.e. 27th March 2019 that these instructions have been communicated to all their branches for meticulous compliance and that the Notice Boards of branches are prominently displaying the message that “Taxes and Duties are accepted here under the 1Link’s OTC facility”.
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Option of refund through bonds can be availed by March 25: FBR
ISLAMABAD: Federal Board of Revenue (FBR) has asked sales tax refund claimants to avail option of bonds by March 25, 2019.
“Those who wish to be included in the first phase of bond issuance may furnish their options by March 25, 2019,” the FBR said in a notice on Thursday.
The FBR said that in order to facilitate exporters and other businesses, it has been decided to issue them sales tax refund bonds in the Sales Tax Act, 1990 for this purpose:
The bonds shall be tradeable, SLR eligible and shall act as collateral for getting bank loans.
The bonds also carry simple profit of 10 percent per annum over three-year maturity period.
The FBR said that those claimants willing to get refund payment through bonds may furnish their options.
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FBR notifies promotion of IR officers to BS-16
ISLAMABAD: Federal Board of Revenue (FBR) on Thursday notified promotions of steno-typists and supervisors/head clerks of Inland Revenue Department to BS-16 with immediate effect.
Through a notification following steno-typists have been promoted as assistant private secretary (BS-16) on regular basis with immediate effect:
01. Alamgir Khan, RTO Peshawar
02. Sirajuddin, RTO Peshawar
03. Zaheer Iqbal, RTO Rawalpindi (He will actualize promotion with effect from April 14 on retirement of Javaid Mukhtar, APS (BS-16), RTO Rawalpindi.
04. Khalid Mehmood, RTO Gujranwala
05. Muhammad Khalid, RTO Gujranwala
Through another notification, the following supervisors/head clerks of Inland Revenue Department have been promoted to the post of Office Superintend Inland Revenue (BS-16) with immediate effect:
01. Muhammad Ramazan, Supervisor, RTO Islamabad
02. Noor Zaman, Supervisor, RTO Peshawar
03. Muhammad Mukhtiar, head clerk, RTO Peshawar
04. Muhammad Younis, Supervisor, RTO Sahiwal
05. Muhammad Mushtaq, Supervisor, RTO Sahiwal
The FBR said that promotion would take effect subject to the condition that no disciplinary proceedings are pending against them.