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KARACHI: The income tax filers have started enjoying withholding tax exemption on transactions of money through banking channels.
After the implementation of amendments made through Finance Supplementary (Second Amendment) Act, 2019 the income tax return filers are no more required to pay 0.6 percent withholding tax on cash withdrawal.
The exemption is applicable on the taxpayers, who are appeared on the Active Taxpayers List (ATL) for tax year 2018.
Before the amendment the rate of withholding tax was 0.3 percent for return filers on cash withdrawal of Rs50,000 in aggregate from banking system per day.
In order to give incentives to compliant taxpayers and encourage return filing the government exempted the withholding tax on cash withdrawal.
Now the withholding tax on any banking transactions i.e. cash or non-cash transactions is only applicable on non-filers of income tax returns.
The non-filers are required to pay 0.6 percent on transactions under Section 231A and Section 236P of Income Tax Ordinance, 2001 on transactions of Rs50,000 per day.
Tax experts said that the withholding tax on cash withdrawal on non-filers was major impediment in improving banking deposits.
They said that it would encourage non-compliant to file their returns and further the measure would also reduce channels of cash economy.
KARACHI: Federal Board of Revenue (FBR) has allowed duty free import of plant and machinery by industrial and manufacturing units.
The exemption has been allowed through Finance Supplementary (Second Amendment) Act, 2019 under Chapter 84 and 85 of Customs Act, 1969.
The FBR said that plant and machinery shall be allowed zero percent customs duty but it should be excluded consumer durable goods and office equipment as imported by Greenfield industries, intending to manufacture taxable goods, during their construction and installation period.
The exemption of customs duty is available on fulfillment of following conditions, namely:
(a) the importer is registered under the Sales Tax Act on or after the first day of July, 2019
(b) the industry is not established by splitting up or reconstruction or reconstruction of an undertaking already in existence or by transfer of machinery or plant from another industrial undertaking in Pakistan.
(c) exemption certificate issued by the commissioner Inland Revenue having jurisdiction; and
(d) The goods shall not be sold or otherwise disposed of without prior approval of the FBR and the payment of customs duties and taxes leviable at the time of import.
ISLAMABAD: The government has increased mobile handset levy up to Rs7,000 per set from the date of implementation of Finance Supplementary (Second Amendment) Act, 2019.
The government through Finance Act, 2018 introduced mobile hand set levy at different rates as values of smart phones were determined in Pak Rupee value.
However, through Finance Supplementary (Second Amendment) Act, 2019, the determination of value of smart phones has been changed to US Dollar and the categories have been increased to six.
Following are the amendment to levy on mobile handsets:
01. Mobile phones have cost and freight value up to $30: No levy
02. Mobile phones have cost and freight value above $30 and up to $100: No levy
03. Mobile phones have cost and freight value above $100 and up to $200: Rs500
04. Mobile phones have cost and freight value above $200 and up to $350: Rs1,500
05. Mobile phones have cost and freight value above $350 and up to $500: Rs3,500
06. Mobile phones have cost and freight value above $500: Rs7,000
Previously there were four categories, which were as follow:
01. Where Import value of handset (including duties and taxes) does not exceed Rs.10,000/: No levy
2. Where Import value of handset (including duties and taxes) exceeds Rs.10,000 but does not exceed Rs.40,000/: Rs1,000
3. Where Import value of handset (including duties and taxes) exceeds Rs.40,000 but does not exceed Rs.80,000/: Rs3,000
4. Where Import value of handset (including duties and taxes) exceeds Rs.80,000/: Rs5,000
ISLAMABAD: The federal government has set up Directorate General of International Tax Operations for recovery of tax in undeclared off-shore assets and incomes.
According to Finance Supplementary (Second Amendment) Act, 2019, the directorate has been established under new section 230E of Income Tax Ordinance, 2001.
The new section is as follow:
Section 230E: Directorate General of International Tax Operations:
Sub-Section (1): The Directorate General of International Tax Operations shall consist of a Director General and as many Directors, Additional Directors, Deputy Directors, Assistant Directors and such other officers as the Federal Board of Revenue (FBR) may, by notification in the official Gazette, appoint.
Sub-Section (2): The Board may, by notification in the official Gazette,-
(a) specify the functions and jurisdiction of the Director General and its officers; and
(b) confer the powers of authorities specified in Section 207 upon the Directorate General and its officers.
Sub-Section (3): The functions and powers of the Directorate General of International Tax Operations shall include but not limited to –
(a) receive and send information from other jurisdiction under spontaneous, automatic and on demand exchange of information under exchange of information agreements;
(b) levy and recover tax by passing an assessment order under section 123(1A) in case of undeclared off-shore assets and incomes;
(c) receive, transmit and exchange country by country reports to the jurisdictions that are parties to international agreements with Pakistan; and
(d) conduct transfer pricing audit in cases selected for such audit by the Director General of International Tax Operations.
Sub-Section (4): The FBR may, by notification in the official Gazette, specify the criteria for selection of the taxpayer for transfer pricing audit.
Explanation: For the removal of doubt, it is clarified that transfer pricing audit refers to the audit for determination of transfer price at arm’s length in transactions between associates and is independent of audit under Section 177 and 214C which is audit of the income tax affairs of the taxpayer.
ISLAMABAD: The federal government has allowed non-filers of income tax returns to purchase locally manufactured motor vehicles.
According to Finance Supplementary (Second Amendment) Act, 2019, the government lifted the mandatory condition of return filing for purchase of motor car.
Further through the Act, non-resident Pakistani citizens holding international passport have also been allowed to registered imported or locally manufactured cars.
“227C. Restriction on purchase of certain assets
Notwithstanding anything contained in any law, for the time being in force,—
(a) any application for booking, registration or purchase of a new locally manufactured motor vehicle or for first registration of an imported vehicle shall not be accepted or processed by any vehicle registering authority of Excise and Taxation Department or a manufacturer of a motor vehicle respectively, unless the person is a filer.; and
(b) any application or request by a person to any authority responsible for registering, recording or attesting transfer of any immovable property, exceeding five million rupees, for registering or attesting the transfer shall not be accepted or processed by such authority, unless the person is a filer:
“Provided that the provisions of clause (a) shall not apply in respect of,─
(i) locally manufactured motor vehicle; or
(ii) a person holding a Pakistan origin card or a national identity card for overseas Pakistanis or a non-resident Pakistani citizen holding international passport who produces a certificate from a scheduled bank of receipt of foreign exchange remitted from outside Pakistan through normal banking channels during a period of sixty days prior to the date of booking, registration or purchase of motor vehicle:
Provided further that the provisions of clause (b) shall not apply to,─
(i) a legal heir acquiring property in inheritance; or
(ii) a person holding a Pakistan origin card or a national identity card for overseas Pakistanis or a non-resident Pakistani citizen holding international passport who produces a certificate from a scheduled bank for receipt of foreign exchange remitted from outside Pakistan through normal banking channels during a period of sixty days prior to the date of registering, recording or attesting transfer.”
ISLAMABAD: Federal Board of Revenue (FBR) will issue sales tax and income tax refund bonds through its subsidiary company ‘FBR Refund Settlement Company (Private) Limited.
ISLAMABAD: The Federal Board of Revenue (FBR) has imposed regulatory duty up to Rs18,500 per set on import of mobile phones.
The FBR issued SRO 327(I)/2019 on Monday to amend the SRO 1265(I)/2018 dated October 16, 2018, and imposed regulatory duty on six different categories of mobile phones imported under HS Code 8519.1219.
The new rate of regulatory will be as follow:
01. Mobile phones having Cost and Freight value up to $30 per set: Rs180 per set
02. Mobile phones having Cost and Freight value above $30 per set but not exceeding $100 per set: Rs1,800 per set
03. Mobile phones having Cost and Freight value above $100 per set but not exceeding $200 per set: Rs2,700 per set
04. Mobile phones having Cost and Freight value above $200 per set but not exceeding $350 per set: Rs3,600 per set
05. Mobile phones having Cost and Freight value above $350 per set but not exceeding $500 per set: Rs10,500 per set
06. Mobile phones having Cost and Freight value above $500 per set: Rs18,500 per set
ISLAMABAD: Federal Board of Revenue (FBR) on Monday announced reward for whistleblowers for helping tax authorities in detection and confiscation of benami properties.
The FBR issued SRO 326(I)/2019 to notify rules calling Benami Transactions (Prohibition) Rules, 2019 in order to implement the benami law, which was passed in February 2017.
The FBR said that for the purpose of reward, the provisions of the Inland Revenue Reward Rules, 2016 except as specified in these rules shall mutatis mutandis apply.
Following are the rewards for the whistleblowers:
01. Benami property value Rs2,000,000 or les. The amount of reward shall be five percent of the price of benami property.
02. Benami property value more than Rs2,000,000 but not more than Rs5,000,000. The amount of reward shall be Rs100,000 plus four percent of the price of benami property in excess of Rs2,000,000.
03. Benami property value over Rs5,000,000. The amount of award shall be Rs220,000 plus three percent of the price of benami property in excess of Rs5,000,000.
Under the rules the FBR has been empowered to provisionally attach benami property or confiscate it.
The benami law was passed by the national assembly two years back with aim to bring those persons into tax net, who had concealed their undisclosed assets in the name of others.
ISLAMABAD: Federal Board of Revenue (FBR) updated Active Taxpayers List (ATL) on Monday and added around 42,000 taxpayers’ names since launch of new list.
KARACHI: Power supply companies are required to deduct and collect advance tax from industrial and commercial consumers at rates specified.
According to updated Income Tax Ordinance, 2001 issued by Federal Board of Revenue (FBR), the Section 235 explained the rates of advance tax on consumption of electricity.
Section 235: Electricity consumption
Sub-Section (1): There shall be collected advance tax at the rates specified in Part-IV of the First Schedule on the amount of electricity bill of a commercial or industrial consumer.
Rate of collection of tax under section 235 where the gross amount of electricity bill
(a)
does not exceed Rs. 400
Rs. 0
(b)
exceeds Rs. 400 but does not exceed Rs. 600
Rs. 80
(c)
exceeds Rs. 600 but does not exceed Rs. 800
Rs. 100
(d)
exceeds Rs. 800 but does not exceed Rs. 1000
Rs. 160
(e)
exceeds Rs. 1000 but does not exceed Rs. 1500
Rs. 300
(f)
exceeds Rs. 1500 but does not exceed Rs. 3000
Rs. 350
(g)
exceeds Rs. 3000 but does not exceed Rs. 4500
Rs. 450
(h)
exceeds Rs. 4500 but does not exceed Rs. 6000
Rs. 500
(i)
exceeds Rs. 6000 but does not exceed Rs. 10000
Rs. 650
(j)
exceeds Rs. 10000 but does not exceed Rs. 15000
Rs. 1000
(k)
exceeds Rs. 15000 but does not exceed Rs. 20000
Rs. 1500
(l)
exceeds Rs. 20000.
(i) at the rate of 12 per cent for commercial consumers; (ii) at the rate of 5 per cent for industrial consumers.
Sub-Section (2): The person preparing electricity consumption bill shall charge advance tax under sub-section (1) in the manner electricity consumption charges are charged.
Explanation.— For removal of doubt, it is clarified that for the purposes of this section electricity consumption bill referred to in sub-section (2) means electricity bill inclusive of sales tax and all incidental charges.
Sub-Section (3): Advance tax under this section shall not be collected from a person who produces a certificate from the Commissioner that his income during tax year is exempt from tax.
Sub-Section (4): Under this section, —
(a) in the case of a taxpayer other than a company, tax collected up to bill amount of three hundred and sixty thousand Rupees per annum shall be treated as minimum tax on the income of such persons and no refund shall be allowed;
(b) in the case of a taxpayer other than a company, tax collected on monthly bill over and above thirty thousand rupees per month shall be adjustable; and
(c) in the case of a company, tax collected shall be adjustable against tax liability.
Section 235A: Domestic electricity consumption
Sub-Section (1) There shall be collected advance tax at the rates specified in Division XIX of Part IV of the First Schedule on the amount of electricity bill of a domestic consumer.
The rate of tax to be collected under section 235A shall be-
(i) 7.5% if the amount of monthly bill is Rs. 75,000 or more; and (ii) 0% the amount of monthly bill is less than Rs. 75,000.
Explanation.— For removal of doubt, it is clarified that for the purposes of this section, electricity consumption bill referred to in sub-section (2) means electricity bill inclusive of sales tax and all incidental charges.
Sub-Section (2): The person preparing electricity consumption bill shall charge advance tax under sub-section (1) in the manner electricity consumption charges are charged.
Sub-Section (3): Tax collected under this section shall be adjustable against tax liability.
