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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.

  • Income Tax Ordinance 2001: return filers can claim tax adjustment paid on educational fee

    Income Tax Ordinance 2001: return filers can claim tax adjustment paid on educational fee

    KARACHI: Income tax return filers can claim adjustment of advance tax paid on educational fee.

    According to updated Income Tax Ordinance, 2001 issued by Federal Board of Revenue (FBR) the advance tax collected on education fee under Section 236I is adjustable against total income tax liability of a taxpayer.

    Section 236I: Collection of advance tax by educational institutions

    Sub-Section (1): There shall be collected advance tax at the rate specified in Division XVI of Part-IV of the First Schedule on the amount of fee paid to an educational institution.

    The rate of collection of tax under section 236I shall be 5 percent of the amount of fee.

    Sub-Section (2): The person preparing fee voucher or challan shall charge advance tax under sub-section (1) in the manner the fee is charged.

    Sub-Section (3): Advance tax under this section shall not be collected from a person on an amount which is paid by way of scholarship or where annual fee does not exceed two hundred thousand rupees.

    Sub-Section (4): The term “fee” includes, tuition fee and all charges received by the educational institution, by whatever name called, excluding the amount which is refundable.

    Sub-Section (5): Tax collected under this section shall be adjustable against the tax liability of either of the parents or guardian making payment of the fee.

    Sub-Section (6): Advance tax under this section shall not be collected from a person who is a non-resident and,—

    (i) furnishes copy of passport as an evidence to the educational institution that during previous tax year, his stay in Pakistan was less than one hundred eighty-three days;

    (ii) furnishes a certificate that he has no Pakistan-source income; and
    (iii) the fee is remitted directly from abroad through normal banking channels to the bank account of the educational institution.

  • FBR outlines sales tax amendments through second supplementary finance act

    FBR outlines sales tax amendments through second supplementary finance act

    ISLAMABAD: Federal Board of Revenue (FBR) has summarized amendments to sales tax regime through Finance Supplementary (Second Amendment) Act, 2019 and directed the officials of Inland Revenue to take necessary action for implementation.

    The FBR said that to liquidate huge amount claimed by taxpayers in refunds which have been accumulated over a long time, the government has decided to pay the same through sales tax refund bonds, which shall have a maturity period of three years.

    Simple profit at 10 percent per annum is also proposed to be paid. The claimants shall also be able to raise the much needed cash by selling these notes in the security market.

    A new Section 67A has been inserted in the Sales Tax Act, 1990 to include enabling provisions for payment of refunds in this manner and also to provide for regulatory mechanism relating to issuance, transfer, redemption and other related matters.

    The FBR said that in the Sixth Schedule, the exemption of sales tax already available in relation to plant, machinery and equipment required for power generation from renewable sources of energy has been guaranteed up to June 30, 2023, to provide for certainty and confidence to investors. Same protection has been ensured on the import side of the similar equipment as covered under the Sixth Schedule.

    The FBR said that keeping in view the difficulties being faced by cancer patients and also on the orders of the Supreme Court, items related to ostomy procedures for treatment of cancer patients, which were not expressly and exhaustively mentioned in Sixth Schedule to Sales Tax Act, 1990, have now been so covered by substituting Serial Number 117 and relating it to heading 99.25 in the First Schedule to the Customs Act.

    The FBR said that presently sales tax exemption on plant and machinery is available only to specified sectors. Others sectors have to pay sales tax on import of plant and machinery.

    This sales tax is adjustable against future output tax but such adjustment takes place after a long time when the industry starts selling its product. This serves as an impediment to investment by increasing initial costs.

    In order to encourage green field investment and industrialization, exemption from payment of sales tax on imported plant and machinery to be used for setting up new industry for production of taxable goods has been provided by amending Sixth Schedule to the Sales Tax Act, 1990, as imported by the persons registered on or after 1st July, 2019 through Sr No 150 in Table 1 of Sixth Schedule to the Sales Tax Act, 1990.

    The FBR said that the new rates on the import of cellular mobile phones have been introduced by substitution in the Ninth Schedule to the Sales Tax Act, 1990.

  • FBR explains FED on motor vehicles under Second Amendment Act

    FBR explains FED on motor vehicles under Second Amendment Act

    ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday explained the amendment of Federal Excise Duty (FED) on imported and locally manufactured vehicles through Finance Supplementary (Second Amendment) Act, 2019.

    The FBR said that Serial Number of Table 1 of the First Schedule to the FED Act, 2005 had been amended and duty of the imported motor vehicles of 1800 cc to 3000cc had been enhanced to 25 percent ad valorem.

    Further, a new Serial Number 55A has been inserted whereby rate of federal excise duty has been enhanced to 30 percent ad valorem on import of motor cars, SUVs and other motor vehicles of cylinder capacity of 3000cc of above (other than those vehicles as designed for the transport of 10 or more persons.

    The FBR said that federal excise duty on locally manufactured cars SUVs etc. of engine capacity exceeding 1700CC and above at 10 percent ad valorem had also been introduced.

  • FBR assigns Benami properties cases to BTB zones

    FBR assigns Benami properties cases to BTB zones

    ISLAMABAD: Federal Board of Revenue (FBR) has assigned Broadening of Tax Base (BTB) Zones to initiate cases against Benami properties and directed to submit challan within 120 days.

    The FBR on Wednesday said Benami Transactions (Prohibition) Rules, 2019 have been enforced with immediate effect and BTB zones of Inland Revenue Service have been assigned the duty to establish cases against Benami properties and submit challan to Adjudication Authority within 120 working days.

    After Implementation of Benami Transactions (Prohibition) Rules, 2019.The Federal Board of Revenue (FBR) has clarified that a Benami property means any property which is subject matter of Benami transaction and also includes proceeds from such property.

    Benami transaction encompasses where a property is transferred to, or is held by, a person and the consideration for such property has been provided, or paid by, another person ( the trustees and wife, children, brother or sister to whom property has been transferred from known resources will be excluded);

    A transaction or arrangement in respect of a property carried out or made in a fictitious name; or a transaction or arrangement in respect of a property where the owner of the property is not aware of, or denies knowledge of, such ownership; or a transaction or arrangement in respect of a property where the person providing the consideration is not traceable or is fictitious.

    The potential types of Benami properties include plots, houses, shopping plazas, shops, housing schemes, bank accounts, vehicles, business shares, jewellery, foreign currency, legal documents and intangible properties having financial value.

    During this period, sale, purchase and transfer of property will be banned till further orders.

    Appeal against the decision of Adjudication Authority can be lodged with the Federal Tribunal and after the decision of the Federal Tribunal such properties will be confiscated and sold out by the federal government.

    Furthermore, if the crime of Benami transactions proved, criminal proceedings will be initiated against accused persons and where proven guilty, rigorous imprisonment of one year to seven years can be awarded to such persons. Similarly, persons providing false and baseless information can also be sentenced to rigorous imprisonment of six months to five years.

    In this regard, the whistleblowers will be entitled to a cash reward for providing credible information leading to detection of Benami property or transaction. If property is worth Rs.2,000,000 or less, five percent of price of Benami property will be given to informer.

    If property’s worth is more than Rs.2,000,000 or 5,000,000, four percent of Benami property will be given to informer and where the value of property will be more than Rs.5,000,000, three percent of Benami property will be given to informer.

    It is clarified that this reward will be given only if the information provided is of value and FBR doesn’t already have it and the information was not available in public records and appeal against confiscation of property has attained finality.

  • Advance tax on sales to distributors, dealers and wholesalers

    Advance tax on sales to distributors, dealers and wholesalers

    KARACHI: Federal Board of Revenue (FBR) has made manufacturers responsible for collecting advance tax on sales to distributors, dealers and wholesalers.

    The tax has been imposed under Section 236G of Income Tax Ordinance, 2001.

    Section 236G: Advance tax on sales to distributors, dealers and wholesalers

    Sub-Section (1): Every manufacturer or commercial importer of electronics, sugar, cement, iron and steel products, fertilizer, motorcycles, pesticides, cigarettes, glass, textile, beverages, paint or foam sector, at the time of sale to distributors, dealers and wholesalers, shall collect advance tax at the rate specified in Division XIV of Part IV of the First Schedule, from the aforesaid person to whom such sales have been made.

    The rate of collection of tax under section 236G shall be as follows:-

    Category of SaleRate of Tax
     FilerNon-Filer
    Fertilizers0.7 percent1.4 percent
    Other than Fertilizers0.1 percent0.2 percent

    Sub-Section (2): Credit for tax collected under sub-section (1) shall be allowed in computing the tax due by the distributor, dealer or wholesaler on the taxable income for the tax year in which the tax was collected.

    Section 236H: Advance tax on sales to retailers

    Sub-Section (1): Every manufacturer, distributor, dealer, wholesaler or commercial importer of electronics, sugar, cement, iron and steel products, motorcycles, pesticides, cigarettes, glass, textile, beverages, paint or foam sector, at the time of sale to retailers, “and every distributor or dealer to another wholesaler in respect of the said sectors”, shall collect advance tax at the rate specified in Division XV of Part IV of the First Schedule, from the aforesaid person to whom such sales have been made.

    The rate of collection of tax under section 236H on the gross amount of sales shall be as follows:-

    Category of saleRate of tax
     FilerNon-Filer
    (1)(2)(3)
    Electronics1 percent1 percent
    Others0.5 percent

    Sub-Section (2): Credit for the tax collected under sub-section (1) shall be allowed in computing the tax due by the retailer on the taxable income for the tax year in which the tax was collected.

    Section 236HA: Tax on sale of certain petroleum products

    Sub-Section (1): Every person selling petroleum products to a petrol pump operator or distributor, where such operator or distributor is not allowed a commission or discount, shall collect advance tax on ex-depot sale price of such products at the rate specified in Division XVA of Part IV of the First schedule.

    The rate of collection of tax under section 236HA shall be 0.5 percent of ex-depot sale price for filers and 1 percent for non-filers.

    Sub-Section (2): The tax deductible under sub-section (1) shall be a final tax on the income arising from the sale of petroleum products to which sub-section (1) applies.

    Related Stories
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    Income Tax Ordinance 2001: advance tax on sale, purchase of immovable properties
    Income Tax Ordinance 2001: advance tax on domestic, international air tickets
    Income Tax Ordinance 2001: advance tax on electricity consumption

  • FBR extends last date for submitting customs proposals for budget 2019/2020

    FBR extends last date for submitting customs proposals for budget 2019/2020

    ISLAMABAD: Federal Board of Revenue (FBR) has extended the last date for submitting customs related budget proposals for 2019/2020.

    In a notification to all chambers and association, the FBR said that the board issued a letter on January 25, 2019 for submitting customs proposals for budget 2019/2020.

    The proposals would cover three areas i.e. changes in Customs Tariff rates, Rules/Procedures and Customs Act, 1969.

    The FBR said that to enable the Customs Wing of the FBR to properly process and evaluate each proposal, three separate formats had been attached to the letter for preparing the proposals on MS Excel Sheets.

    The FBR said that while formulating the proposals, provision of the existing customs tariff rates/law may carefully be studied/consulted.

    Wherever required the proposal may be supported with the statistical data etc. so that it is not dropped on account of any such infirmity.

    In case of local manufacturer claiming tariff protection on its finished products or concession o its raw materials, complete given annexure as well, without which it would not be possible to process these types of proposals.

    It is requires that the proposals may be sent to the FBR by March 25, 2019.

    The government is scheduled to announce the budget 2019/2020 in the first week of June 2019.

  • Advance tax on electronic media, cable operators

    Advance tax on electronic media, cable operators

    KARACHI: Electronic media and cable operators are required to pay adjustable advance tax at the time of obtaining new license or renewal of license.

    According to updated Income Tax Ordinance, 2001 issued by the Federal Board of Revenue (FBR), Pakistan Electronic Media Regulatory Authority (PEMRA) shall collect the advance tax at the time of issuance of licence for distribution services or renewal of the licence to a licencee under Section 236F of the Ordinance.

    Section 236F: Advance tax on cable operators and other electronic media

    Sub-Section (1): Pakistan Electronic Media Regulatory Authority, at the time of issuance of licence for distribution services or renewal of the licence to a licencee, shall collect advance tax at the rates specified in Division XIII of Part IV of the First Schedule.

    (1) The rate of tax to be collected under section 236F in the case of Cable Television Operator shall be as follows:—

    License Category as provided in PEMRA RulesTax on License FeeTax on Renewal
    HRs. 7,500Rs. 10,000
    H-IRs. 10,000Rs. 15,000
    H-IIRs. 25,000Rs. 30,000
    RRs. 5,000Rs. 12,000
    BRs. 5,000Rs. 40,000
    B-1Rs. 30,000Rs. 35,000
    B-2Rs. 40,000Rs. 45,000
    B-3Rs. 50,000Rs. 75,000
    B-4Rs. 75,000Rs. 100,000
    B-5Rs. 87,500Rs. 150,000
    B-6Rs. 175,000Rs. 200,000
    B-7Rs. 262,500Rs. 300,000
    B-8Rs. 437,500Rs. 500,000
    B-9Rs. 700,000Rs. 800,000
    B-10Rs. 875,500Rs. 900,000

    (2) The rate of tax to be collected by Pakistan Electronic Media Regulatory Authority under section 236F in the case of IPTV, FM Radio, MMDS, Mobile TV, Mobile Audio, Satellite TV Channel and Landing Rights, shall be 20 per cent of the permission fee or renewal fee, as the case may be.

    “(3) In addition to tax collected under paragraph (2) Pakistan Electronic Media Regulatory Authority shall collect tax at the rate of fifty per cent of the permission fee or renewal fee, as the case may be, from every TV Channel on which foreign TV drama serial or a play in any language, other than English, is screened or viewed.”

    Sub-Section (2): The tax collected under sub-section (1) shall be adjustable.

    Sub-Section (3): For the purpose of this section, “cable television operator” “DTH”, “Distribution Service”, “electronic media”, “IPTV”, “loop holder”, “MMDS”, “mobile TV”, shall have the same meanings as defined in Pakistan Electronic Media Regulatory Authority Ordinance, 2002 (XIII of 2002) and rules made thereunder.

    Related Stories
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    Income Tax Ordinance 2001: advance tax on sale, purchase of immovable properties
    Income Tax Ordinance 2001: advance tax on domestic, international air tickets
    Income Tax Ordinance 2001: advance tax on electricity consumption
    Income Tax Ordinance 2001: advance tax on cash withdrawal

  • Asad Umar reviews revenue collection, broadening of tax base

    Asad Umar reviews revenue collection, broadening of tax base

    KARACHI: Finance Minister Asad Umar on Monday reviewed the revenue collection progress and ongoing drive of broadening of tax base at a meeting with senior officials of Federal Board of Revenue (FBR).
    The meeting was attended by Member Inland Revenue Operations Ms. Seema Shakil, Member Customs Operations Agha Jawad, Chief Commissioners Inland Revenue and Chief Collectors of Pakistan Customs.
    Ms. Seema Shakil updated the finance minister about revenue collection and performance of Inland Revenue besides giving details of ongoing campaign for broadening of tax base.
    She apprised the finance minister about the difficulties in the way of taking harsh action against tax evaders.
    The sources said that the finance minister issued directives for taking harsh measures against tax evaders including high profile cases.
    He also assured all logistic support to FBR officials in taking actions against influential persons.


    Member Customs Operations Agha Jawad also briefed the finance minister about the working of customs clearance. The member said that transparency had been ensured in the clearance process in order to facilitate genuine taxpayers.
    The member pointed out high volume of smuggled betel nut.
    The finance minister directed to evolve a tariff mechanism for betel nut.
    The finance minister directed both the wings of FBR to ensure facilitation of taxpayers and focus on tax evaders.

  • FBR adds over 114,000 return filers to ATL

    FBR adds over 114,000 return filers to ATL

    ISLAMABAD: Federal Board of Revenue (FBR) has added over 114,000 return filers to Active Taxpayers List (ATL) following the grant of extension in filing income tax returns for Tax Year 2018 up to March 31, 2019.

    The FBR issued weekly updated ATL 2018 on Monday, which showed the number of active taxpayers increased to 1.75 million.

    The FBR issued first ATL 2018 on March 01, 2019 which had carried 1.6 million taxpayers in the list.

    The appearance of ATL is mandatory for availing reduced rate of withholding tax rate and other benefits available only to return filers.

    Through Finance Act, 2018, a section 182A was inserted to Income Tax Ordinance, 2001 which barred the late filers to appear on the ATL.

    Therefore, the ATL issued on March 01, 2019 only those taxpayers were included who filed their returns by December 15, 2018 in case of salaried persons, business individuals and companies with special years and December 31, 2018 for companies with normal tax year.

    However, the FBR last week extended the last date for filing income tax returns for all classes of taxpayers. Hence, those taxpayers who have filed their returns after December 15 or December 31 became eligible for ATL.

    Related Stories
    Late filers to become part of ATL as FBR extends last date for filing return up to March 31

  • FBR to improve capacity for action against tax evaders

    FBR to improve capacity for action against tax evaders

    KARACHI: Federal Board of Revenue (FBR) is increasing its capacity to handle large size data of tax evaders, FBR chairman said in a meeting with members of Karachi Chambers of Commerce and Industry (KCCI).

    (more…)