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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.

  • IR barred from arresting women on tax default

    IR barred from arresting women on tax default

    KARACHI: The offices of Inland Revenue are prohibited for arresting women on charge of tax default. Besides, the offices also cannot arrest a minor.

    According to Income Tax Rules, 2002 there is prohibition against arrest of woman or minor.

    The commissioner of Inland Revenue shall not order the arrest or detention in the civil prison of: a woman; or any person who, in his opinion, is a minor or of unsound mind.

    The rules also envisaged certain conditions on IR officers regarding entry into dwelling house for arresting tax defaulter.

    For the purpose of making an arrest under these rules,-

    (a) no dwelling house shall be entered after sunset and before sunrise;

    (b) no outer door of a dwelling house shall be broken open unless such dwelling house or a portion thereof is in the occupancy of the defaulter and he or any other occupant of the house refuses or in any way prevents access thereto; but, when the person executing any such warrant has duly gained access to any dwelling house, he may break open the door or any room or apartment if he has reason to believe that the defaulter is likely to be found there; and

    (c) no room, which is in the actual occupancy of a woman who, according to the custom of the country, does not appear in public shall be entered into unless the officer authorized to make the arrest has given notice to her that she is at liberty to withdraw and has given her reasonable time and facility for withdrawing.

    In case of illness of a tax defaulter the commissioner can release by cancelling the warrant for the arrest.

    Release on ground of illness.-

    (1) At any time after a warrant for the arrest of a defaulter has been issued, the Commissioner may cancel it on ground of the serious illness of the defaulter.

    (2) Where a defaulter has been arrested, the Commissioner may release him if, in the opinion of the Commissioner of Tax, he is not in a fit state of mind to be detained in the civil prison.

    (3) Where a defaulter has been committed to the civil prison, he may be, released therefrom by the Commissioner on the ground of the existence of any infectious or contagious disease or on the ground of his suffering from any illness.

    (4) A defaulter released under this rule may be re-arrested, but the period of his detention in the civil prison shall not in the aggregate exceed that authorized by rule 164.

  • Valuation to be issued to plug loopholes in sales tax collection on imported consumer goods

    Valuation to be issued to plug loopholes in sales tax collection on imported consumer goods

    KARACHI: Federal Board of Revenue (FBR) to issued sales tax valuation in order to plug revenue leakages on imported consumer items, sources said.

    The sources said that the FBR had identified massive misdeclaration and under invoicing on imported consumer items falling under Third Schedule of Sales Tax Act, 1990.

    In the latest budget 2019/2020, an amendment was introduced to Sales Tax Act, 1990 under which printing of retail price was made mandatory on imported consumer goods.

    The measure was introduced to end the assumed prices in order to recover sales tax on fixed retail prices on imported items.

    The law has been applicable since July 01, 2019 but due to difficulties faced by importers of such goods the FBR allowed relief in declaration without printing of retail prices subject to some conditions.

    The FBR issued Sales Tax General Order (STGO) on August 07, 2019 that the retail price, if not printed at import stage, can be printed at the port of import.

    According to the STGO: “If that is also not possible, the importer shall undertake to print the retail price after clearance of goods and shall pay sales tax on retail price which shall not be less than 130 percent of the customs value increased by assessed customs duties, excise duty and other applicable taxes and charges excluding sales tax.”

    The sources said that tax offices in Karachi conducted survey and found the selling price of imported consumer items was much higher than the declared value at customs clearance stage.

    They said that the finding of the survey had been sent to the FBR headquarters for taking further action.

    The printing of retail prices is mandatory for importers on items such as tea, juices, perfumes, household electrical goods, including air conditioners, refrigerators, deep freezers, televisions, recorders and players, electric bulbs, tube-lights, electric fans, electric irons, washing machines and telephone sets. These items shall also include house hold gas appliance, including cooking range, ovens, geysers and gas heaters.

    Besides items such as foam mattresses, paints, lubricating oils, storage batteries, tyers, motor cycles and auto rickshaws have also been included in the regime of printed retail prices.

    The sources said that as per latest development the FBR had decided to issue valuation of such imported consumer goods in order to realize correct sales tax at import stage.

  • Procedure to make application for income tax refund payment

    Procedure to make application for income tax refund payment

    KARACHI: A taxpayer is allowed to claim refund against excess payment of income tax against total liability during a tax year.

    Federal Board of Revenue (FBR) has notified procedure to apply for income tax refunds.

    The taxpayer should follow the procedure in order to file an application for availing income tax refund:

    Prescribed application for refund of tax.- An application for refund of tax under section 170 shall be made in the following form, namely:-

    The Commissioner,

    ______________ Zone,

    ______________ (City).

    Dear Sir,

    I _________________________________________________ of _________________________________ hereby declare:-

    (a) that my total income computed in accordance with the provisions of Income Tax Ordinance, 2001 (XLIV of 2001), during the year ending on being the income year for the assessment for the year ending on the _______________ amounted to Rs._______________.

    (b) that the total tax chargeable in respect of such total income is Rs._______________.

    (c) that the total amount of tax paid is Rs._______________.

    (d) that I have already filed evidence of payment of tax along with my return of income for the year or I enclose herewith evidence of tax already paid during the tax year for taking credit.

    I, therefore, request that a refund of Rs._______________ may be allowed to me.

    Yours faithfully_________________________

    Signature ____________________________

    NTN_________________________________

    Address_______________________________

    I hereby declare that I am resident/ non-resident and that what is in this application is correct.

    Date ____________________ Signature________________

  • FBR asks professionals to declare annual income, assets

    FBR asks professionals to declare annual income, assets

    ISLAMABAD: Federal Board of Revenue (FBR) has asked professional bodies of doctors, lawyers, engineers etc. to pursue their members for file mandatory declarations of income and assets.

    In a tweet message the FBR said that members of all professional bodies are liable to declare their income and assets during a year through electronic return filing.

    Sources in the FBR said that the authorities had decided to take harsh action against unreported income. They said that professionals of certain bodies were engaged in cash based transactions and avoid declaring true income or file declaration with nominal income.

    The last date for filing income tax returns is December 31, 2019, which was already extended four times as the actual last date for filing income tax returns was September 30, 2019.

    The sources said that the professionals were taking huge amount in term of fee from their clients / patients but mostly in cash bases.

    The sources further said that the FBR would obtain third-party information of such unreported incomes besides assistance would be taken from withholding statements and returns filed by other taxpayers, who made payments.

    They said that Income Tax Rules, 2002 prescribed record keeping by professional in order to verify their declarations.

    The professionals (like medical practitioners, legal practitioners, accountants, auditors, architects, engineers etc.) are required to keep following records:-

    (a) Serially numbered and dated patient-slip/ invoice/ receipt for each transaction of sale or receipt containing the following:-

    (i) taxpayer’s name or the name of his business or profession, address national tax number or CNIC and sales tax registration number, if any;

    (ii) the description, quantity and value of medicines supplied or details of treatment /case/ services rendered (confidential details are not required) and amount charged; and

    (iii) the name and address of the patient/client:

    Provided that the condition of recording address of the patient on the patient slip under this clause shall not apply to general medical practitioners;

    (b) Daily appointment and engagement diary in respect of clients and patients:

    Provided that this clause-shall not apply to general medical practitioners;

    (c) Daily record of receipts, sales, payments, purchases and expenses; a single entry in respect of daily receipts, sales, purchases and different heads of expenses will suffice; and

    (d) Vouchers of purchases and expenses.

  • FBR launches sales tax invoice verification system

    FBR launches sales tax invoice verification system

    ISLAMABAD: Federal Board of Revenue (FBR) has launched online system for verification of invoices, which issued against purchases from retail outlets.

    The FBR launched the integration of sales and purchases by Tier-1 retailers with aim to encourage 100 percent invoice submission to the revenue body.

    The FBR has given deadline of December 15, 2019 to all Tier-1 retailers, who are required to integrate their Point of Sale (POS) with the FBR system for submission of sale invoice on real-time basis.

    The FBR issued following procedure for reduced sales tax on invoices issued through online system:

    • Customers visit the counter to pay for his/her shopping

    • Customer visit the counter to pay for his/her shopping

    • Counter Boy Prepare the Invoice

    • Invoice is forwarded to FBR system for invoice number

    • Fiscal Invoice is generated, encrypted and stored in FBR Sale Data Controller and returns a fiscal invoice number to POS.

    • FBR Sale Data Controller Synch. the data with FBR central server on periodic basis.

    • POS generate the QR Code for fiscal invoice.

    • The receipt is printed out from the POS and physically delivered to the customer

    • Customer receive the printed fiscal invoice and verify it from FBR System using any of proposed mode.

    • On verification of invoice, FBR system mark this invoice for 6 percent tax collection. In case of non-verification of invoice, Bill will be changed as 9 percent tax collection.

    • Customer pay the bill according to the applied tax.

  • IR commissioners empowered to issue trial registration number

    IR commissioners empowered to issue trial registration number

    KARACHI: Commissioners of Inland Revenue have been empowered to issue trial registration number to taxpayers, who failed to comply with notices issued in this regard.

    Officials in Federal Board of Revenue (FBR) said that tax laws empowered IR commissioners to enforce income tax registration.

    They said that a commissioner having jurisdiction over a case may register a person as a taxpayer where he is satisfied that the income of the person is taxable and is required to file a return of income under section 114 of Income Tax Ordinance, 2001.

    The Commissioner shall issue to the taxpayer a letter under sub-section(2) of section 181 to submit an application for registration prescribed under rule 80 along with documents specified therein within a reasonable time given in the said letter.

    In case of compliance NTN certificate shall be issued accordingly.

    “In case of failure of the taxpayer to comply with the letter issued under sub-section (2) of section 181, the Commissioner shall register the taxpayer on a Trial Registration Number (TRN) for which a serially numbered Trial Register shall be maintained by the Commissioner.”

    The Trial Register shall contain the basic information of the taxpayer like name of the person or business, available address, CNIC “if provided”, nature of income generating activity and any other information regarded useful by the Commissioner. In such case, statutory notices shall be issued for assessment of income or other legal obligation of the taxpayer under the Ordinance on TR Number:

    Provided that before allotment of Trial Registration Number the Commissioner shall verify and match the particulars of the taxpayer from the NTN Master Index to avoid duplication of registration.

    In case any assessment is made or any liability is created by the Commissioner under the Income Tax Ordinance, 2001 against the taxpayer, the Commissioner on the basis of information as contained in Trial Register, allot an NTN to the taxpayer within fifteen days of the date of completion of assessment or creation of a liability under the Ordinance.

  • Informers to get 20% reward money in recovery against tax evasion

    Informers to get 20% reward money in recovery against tax evasion

    KARACHI: A person, who provides definite information of tax evasion and subsequent recovery, will get 20 percent of the recovered amount as reward.

    Officials of Federal Board of Revenue (FBR) told that the tax laws had defined the payment of reward.

    The amount of reward, in cases of exhibiting meritorious conduct to recovery of tax evaded or refund unlawfully paid, would be apportioned.

    The officials said that where an informer is involved in recovery of evaded tax then the informer will get 20 percent of the total recovery. The breakup of the reward amount would be 30 percent for employees involved in recovery. Further 10 percent will be given to supervising officers who write performance evaluation reports (PERs)

    The supporting staff of officers will get 15 percent, while 25 percent will be disbursed amongst Inland Revenue Welfare Fund.

    The officials said that where no informer is involved, the apportionment of the reward would be:

    Employees will get 50 percent; supervising officers who write performance evaluation reports (PERs) at 10 percent; supporting staff will get 15 percent; and Inland Revenue Welfare Fund will get 25 percent.

    The officials said that the amount of reward relating to officers and officials in the case where more than one individual is involved shall be distributed in proportion of their basic pay.

  • Lawyers, doctors require to keep payment receipt record for tax purpose

    Lawyers, doctors require to keep payment receipt record for tax purpose

    In a move to enhance transparency and accountability, the Federal Board of Revenue (FBR) has implemented stringent regulations requiring professionals such as doctors, lawyers, and accountants to maintain meticulous records of payments received from clients or patients for income tax purposes.

    (more…)
  • Amnesty declarants can pay tax at 20pc default surcharge by Dec 31

    Amnesty declarants can pay tax at 20pc default surcharge by Dec 31

    KARACHI: Persons / companies can avail amnesty scheme 2019 by paying 20 percent default surcharge by December 31, 2019 subject to declaration filed by due date.

    Officials at Federal Board of Revenue (FBR) said that the scheme was promulgated through presidential ordinance on May 14, 2019 to allow the non-documented economy’s inclusion in the taxation system and serve the purpose of economic revival and growth by encouraging a tax compliant economy.

    The amnesty was granted till on or before June 30, 2019 for a declaration only in respect of any –

    (a) undisclosed assets, held in Pakistan and abroad, acquired up to June 30, 2018;

    (b) undisclosed sales made up to June 30, 2018;

    (c) undisclosed expenditure incurred up to June 30, 2018; or

    (d) benami assets acquired or held on or before the date of declaration.

    As per the time of payment, the scheme allowed the due date for payment of tax on or before June 30, 2019. However after the due date, the tax shall be paid on or before June 30, 2020 along with default surcharges.

    If person fails to pay tax and default surcharge, the declaration made would be void and would be deemed to have never been made under the scheme.

    The rate of tax for the amnesty scheme was:

    01. All assets except domestic immovable properties at 4 percent

    02. Domestic immovable properties at 1.5 percent

    03. Foreign liquid assets not repatriated at 6 percent

    04. Unexplained expenditure at 4 percent

    05. Undisclosed sales at 2 percent.

    The rate of default surcharge under the scheme has been set to increase by a default surcharge by amount percentage as specified following:

    01. If the tax is paid after the June 30, 2019 and on or before September 30, 2019, the rate of default surcharge shall be 10 percent of the tax amount.

    02. If the tax is paid after September 30, 2019 and on or before December 31, 2019, the rate of default surcharge shall be 20 percent of the tax amount.

    03. If the tax is paid after December 31, 2019 and on or before March 31, 2020, the rate of default surcharge shall be 30 percent of the tax amount.

    04. If the tax is paid after March 31, 2020 and on or before June 30, 2020, the rate of default surcharge shall be 40 percent of the tax amount.

  • Procedure to get registered as informer with tax authority

    Procedure to get registered as informer with tax authority

    ISLAMABAD: The income tax rules has described the procedure for a person to get registered as an informer with Federal Board of Revenue (FBR) in order to provide information of tax evasion and get reward as per law.

    The tax officials said that Income Tax Rules, 2002 has explained the criteria for a person to become informer.

    According to the rules, a person, other than a lunatic or idiot, may be registered as informer, if he fulfills the criteria of whistleblower as defined in the tax laws.

    A registered informer shall be liable to de-registration on such condition to be recorded in writing and as may be deemed fit by Chief Commissioner, member or Director General, as the case may be.

    Registration of informer

    (1) Subject to section 227B of the Income Tax Ordinance 2001 (XLIX of 2001), section 72D of the Sales Tax Act, 1990 and section 42D of the Federal Excise Act, 2005, as the case may be, any person desirous of getting himself registered as an informer may make an application to the Chief Commissioner for registration under this rule.

    (2) The application under sun-rule (1) shall be in the prescribed form and shall be verified in the prescribed manner.

    (3) The application shall be accompanied by the following documents, namely.-

    (a) copy of the Computerized National Identity Card of the applicant;

    (b) copy of national tax number (NTN) certificate; and

    (c) a duly sworn in affidavit stating therein that the information being provided is correct and nothing has been concealed there from and that in case any incorrect information is provided or any information is concealed he shall be liable to penal action under the laws for the time being in force.

    Submission of information and further action thereupon

    (1) An informer shall submit any information regarding concealment or evasion of tax leading to detection or collection of taxes, fraud, corruption or misconduct that is in his possession to the Chief Commissioner giving precise details of the alleged act along with all supporting evidences that are in his possession:

    Provided that no information shall be entertained unless it gives precise details of the alleged act and is accompanied with the supporting evidences.

    (2) On receipt of the information, the Chief Commissioner shall scrutinize the information and forward it to the concerned Commissioner.

    (3) On receipt of the information from the Chief Commissioner, the concerned Commissioner shall conduct such further enquiry as he may deem fit and submit his report to the Chief Commissioner.

    (4) On completion of the enquiry, the concerned Commissioner shall take such further action as may be required under the tax laws or any other law for the time being in force, as may be necessary on the basis of the facts of the case, and furnish his report to the Chief Commissioner.

    (5) Notwithstanding anything contained in these rules, an informer, who −

    (a) has knowingly provided false information under these rules; or

    (b) has provided the information under these rules with the intention to intimidate or blackmail a person, or to bring him into disrepute, or to otherwise cause him financial loss, shall be liable to punishment and fine under the tax laws and other laws for the time being in force.