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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.

  • FBR allows retail price printing relaxation on imported consumer items

    FBR allows retail price printing relaxation on imported consumer items

    ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday extended relaxation on mandatory printing of retail prices on imported consumer items after receiving several representations from stakeholders.

    On the basis of representations, the FBR granted relaxation by issuing sales tax notification.

    The FBR said that for the imports from North and South America, if bill of lading date is prior to June 30, 2019, the condition of printing retail price is relaxed up to August 31, 2019, subject to the condition that the importer declares retail price for each of the imported items in terms of Section 2(27) of the Sales Tax Act, 1990, and that the goods are assessed for sales tax on such declared retail price.

    FBR said that the retail price, if not printed at import stage, can be printed at the port of import in the prescribed manner.

    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 rice 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 FBR said that if the phrase ‘in retail packing’ appears against any item/entry in the Third Schedule, the retail price taxation thereon shall not apply if such items are not in retail packing at the time of import.

    All other items shall be charged to sales tax on the basis of retail price even if not in retail packing.

    Under existing law, the goods being raw materials or intermediary goods, with customs duty rate below 16 percent are excluded from purview of value addition tax under the Twelfth Schedule.

    Such items, if imported by a commercial importer, are in such form that the same can be sold to the customer without further manufacturing process, such as tea, spices etc. the same shall be subject to value addition tax.

    Related Post

    FBR allows goods clearance without retail price print till July 31

  • 2019/2020: FBR explains withholding tax on profit on debt

    2019/2020: FBR explains withholding tax on profit on debt

    ISLAMABAD: Federal Board of Revenue (FBR) has explained levy of withholding tax on profit on debt for tax year 2019/2020 applicable from July 01, 2019.

    The FBR said that every person, other than a company, receiving profit on debt from persons mentioned in clause (a) to (d) of sub-section (1) of Section 151 are separately taxed at the rates provided in Division IIIA of Part I of the First Schedule.

    The section 151 explains:

    151. Profit on debt. — (1) Where –

    (a) a person pays yield on an account, deposit or a certificate under the National Savings Scheme or Post Office Savings Account;

    (b) a banking company or financial institution pays any profit on a debt, being an account or deposit maintained with the company or institution;

    (c) the Federal Government, a Provincial Government or a Local Government pays to any person profit on any security other than that referred to in clause (a) issued by such Government or authority; or

    (d) a banking company, a financial institution, a company referred to in sub-clauses (i) and (ii) of clause (b) of sub-section (2) of section 80, or a finance society pays any profit on any bond, certificate, debenture, security or instrument of any kind (other than a loan agreement between a borrower and a banking company or a development finance institution) to any person other than financial institution.

    The FBR said that prior to the Finance Act, 2019, the rates were 10 percent where profit on debt was up to Rs5 million, 15 percent where profit on debt was more than Rs5 million but not more than Rs25 million and 15 percent where profit of debt exceeding Rs25 million.

    Through Finance Act, 2019, the rates of imposition of tax under Section 7B mentioned in Division IIIA, Part I of the First Schedule have been enhanced as:

    01. Where profit on debt does not exceed Rs5 million, the tax rate shall be 15 percent;

    02. Where profit on debt exceeds Rs5 million but does not exceed Rs25 million, the tax rate shall be 17.5 percent; and

    03. Where profit on debt exceeds Rs25 million but does not exceed Rs36 million, the tax rate shall be 20 percent.

    The FBR said that where the profit on debt exceeds Rs36 million in a tax year, section 7B will not be applicable and the profit on debt will not be separately taxed for persons other than companies.

    In such cases, profit on debt will be chargeable to tax under the head ‘income from other sources’ under section 39 and tax shall be imposed at the rates specified in paragraph (1) or (2), as the case may be, of Division I, Part I of the First Schedule.

  • FBR estimates Rs20 billion annual revenue loss in illicit tobacco trade

    FBR estimates Rs20 billion annual revenue loss in illicit tobacco trade

    ISLAMABAD: Federal Board of Revenue (FBR) has estimated around Rs20 billion as revenue loss due to illicit trade of tobacco products.

    The FBR on Tuesday said that the tobacco sector in Pakistan contributed significant revenue in 2018-2019 amounting to Rs 117 Billion (Rs 90.854 billion FED and Rs. 26.147 Billion sales tax).

    However, Pakistan is also facing problem with the illicit trade in tobacco products, which includes undeclared local production, smuggling of tobacco products of foreign brands and counterfeit production. “The illicit trade in tobacco products costs Pakistan more than Rs. 20 billion a year,” the FBR said.

    In order to prevent leakage of revenue, under-reporting of production and sales of tobacco products and to ensure proper payment of FED and Sales Tax on the manufacture and sale of tobacco products, the FBR is mandated to licence the implementation of a track and trace system; which is to be developed, operated and maintained by the licensee for tobacco products manufactured in and imported into Pakistan.

    To this end, the FBR is inviting applications for grant of licence to be issued under the Sales Tax Rules of 2006 for the development, maintenance and operation of track and trace system in accordance with the provisions of the rules and the instructions specified herein below.

    The successful applicant in compliance with SRO 250(I)/2019 dated 26.02.2019 shall implement a track and trace system, including high security tax Stamps/Markers/Codes which includes unique, secure and non-removable identification markings (hereafter referred to as unique identification markings) combined with state-of-the-art electronic monitoring and tracking systems, for the purpose of protecting existing revenue and to facilitate the generation of further revenue streams through the effective reduction of the illicit trade of tobacco products in Pakistan.

    The FBR said that Pakistan ratified the Framework Convention on Tobacco Control (FCTC) on 3rd November 2004 and acceded to the FCTC Protocol to Eliminate Illicit Trade in Tobacco Products on 29th June 2018. Article 8.2of the FCTC Protocol requires Pakistan to establish a tracking and tracing system, to be controlled by Pakistan, for all tobacco products that are manufactured in, imported into or transiting through its territory.

    Pakistan has to embark on a project to implement a track and trace system for tobacco products to meet its national need to monitor and protect its revenues and address the high level of illicit trade within its borders, and to meet its international obligations under FCTC to implement a track and trace system that can form part of a regional and/or global international track and trace regime for tobacco products.

  • FBR imposes major penalty on four customs officials

    FBR imposes major penalty on four customs officials

    KARACHI: Federal Board of Revenue (FBR) has imposed major penalty on four customs officials for misconduct and inefficiency.

    The FBR on Monday issued four different office orders to imposed major penalty including demotion to lower grade and compulsory retirement.

    The FBR imposed the major penalty of “Reduction to the lower post of UDC” upon Qamar Jamal, Appraising Officer (BS-16), Model Customs Collectorate of Port Muhammad Bin Qasim. The FBR found the official guilty of misconduct and inefficiency.

    The FBR imposed the major penalty of “Reduction to the lower post of Appraising Officer” upon Amir Ahmad Samoo, Principal Appraiser (BS-16), Model Customs Collectorate of Appraisement-West, Karachi. The FBR found the official guilty of misconduct and inefficiency.

    The FBR imposed the major penalty of “Compulsory Retirement” upon Rao Muhammad Aslam, Appraising Officer/ (Examiner) (BS-16), Model Customs Collectorate of Appraisement-East, Karachi. The FBR found the official guilty of misconduct and inefficiency.

    The FBR imposed the major penalty of “Reduction to a lower post of UDC” upon Nasir Iqbal, Inspector (BS-16) (Posted as Examining Officer) in Model Customs Collectorate (Appraisement-West), Karachi. The FBR found the official guilty of misconduct and inefficiency.

  • 2019/2020: Withholding tax rates issued on payment for goods and services

    2019/2020: Withholding tax rates issued on payment for goods and services

    KARACHI: Federal Board of Revenue (FBR) has issued withholding tax rates on payment for goods and services during tax year 2019/2020 under Section 153 of Income Tax Ordinance, 2001.

    The FBR said that every prescribed person shall collect withholding tax under Section 153 of Income Tax Ordinance, 2001 from resident persons and permanent establishment in Pakistan of non-resident at the time the amount is actually paid.

    Under Section 153(1)(a) for sale of rice, cotton seed oil and edible oil, the tax rate shall be 1.5 percent of the gross amount.

    Persons not appearing in the Active Taxpayers’ List : The applicable tax rate is to be increased by 100% (Rule-1 of Tenth Schedule to the Ordinance), i.e. 3 percent of the gross amount

    Tax should be collected on supply made by distributors of fast moving consumer goods: two percent of gross amount in case of company; 2.5 percent of gross amount in case of other than company.

    Persons not appearing in the Active Taxpayers’ List The applicable tax rate is to be increased by 100% (Rule-1 of Tenth Schedule to the Ordinance), i.e.: 4 percent of the gross amount in case of company; 5 percent of the gross amount in case of other than company.

    For sale of any other goods: 4 percent of the gross amount in case of company; 4.5 percent of the gross amount in case of other than company.

    Persons not appearing in the Active Taxpayers’ List: The applicable tax rate is to be increased by 100% (Rule-1 of Tenth Schedule to the Ordinance), i.e.: 8 percent of the gross amount in case of a company; 9 percent of the gross amount in case of other than a company.

    Goods: No deduction of tax where payment is less than Rs. 75,000/- in aggregate during a financial year [S.153(1)(a)].

    The FBR said that it shall be minimum tax for all except in the following cases where it shall not be minimum tax on sale or supply of goods, by:

    (i) a company being manufacturers of such goods or

    (ii) Public company listed on registered Stock Exchange in Pakistan.

    The FBR said that under Section 153(1)(b) the tax rate should be collected at 3 percent in case:

    (i) i. Transport services, freight forwarding services, air cargo services, courier services, man power outsourcing services, hotel services, security guard services, software development services, IT Services and IT enabled services as defined in clause (133) of Part I of the Second Schedule, tracking services, advertising services (other than by print or electronic media), share registrar services, engineering services, car rental services, building maintenance services, services rendered by Pakistan Stock Exchange Ltd. & Pakistan Mercantile Exchange Ltd. , inspection, certification, testing & training services.;

    Persons not appearing in the Active Taxpayers’ List :The applicable tax rate is to be increased by 100% (Rule-1 of Tenth Schedule to the Ordinance), i.e. 6 percent of the gross amount.

    ii. In case of rendering or providing of services other than as mentioned at (i) above;

    a) In case of company: 8 percent of the gross amount

    b) In any other case: 10 percent of the gross amount

    c) In respect of persons making payment to electronic & print media for advertising services: 1.5 percent of the gross amount.

    Persons not appearing in the Active Taxpayers’ List : The applicable tax rate is to be increased by 100% (Rule-1 of Tenth Schedule to the Ordinance), i.e.:

    a) In case of company: 16 percent of the gross amount.

    b) In any other case: 20 percent of the gross amount.

    c) In respect of persons making payment to electronic & print media for advertising services: 3 percent of the gross amount.

    Services : No deduction of tax where payment is less than Rs. 30,000/- in aggregate during a financial year [S.153(1)(b)].

    It shall be minimum cases in mentioned above cases.

    Under Section 153(1)(c), the tax rates shall be:

    Execution of Contracts

    i) In case of sportsperson: 10 percent

    ii) In the case of Companies: 7 percent

    iii) In the case of persons other than companies: 7.5 percent

    Persons not appearing in the Active Taxpayers’ List: The applicable tax rate is to be increased by 100% (Rule-1 of Tenth Schedule to the Ordinance), i.e.:

    i) In case of sportsperson: 20 percent

    ii) In the case of Companies: 14 percent

    iii) In the case of persons other than companies: 15 percent

    Minimum Tax for all whereas it will remain adjustable where payments are received on account of execution of contracts by Public Company listed on registered Stock Exchange in Pakistan.

  • FBR issues withholding tax rates on cash, online banking transactions

    FBR issues withholding tax rates on cash, online banking transactions

    KARACHI: Federal Board of Revenue (FBR) has issued withholding tax card for tax year 2019/2020 and prescribed the rate of withholding income tax to be deducted/collected on transactions made through banking system either by cash or online transfers.

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  • RTO Karachi launches crackdown against tax evaders in car sale, purchase business

    RTO Karachi launches crackdown against tax evaders in car sale, purchase business

    KARACHI: Regional Tax Office (RTO)-II Karachi has launched crackdown against tax evaders engaged in business of car sale, purchase and service.

    The Broadening of Tax Base (BTB) Zone of RTO-II Karachi has launched action against tax evaders in automobile industry including persons own automobile showrooms, auto parts dealers, sellers, automobile workshops, car service center, sources said on Saturday.

    The sources said that the BTB zone conducted field survey and collected information from various survey already conducted. It was discovered that automobile showrooms, auto part dealers, sellers, automobile workshops and car service center having booming business activities but large number of them are not registered or not filing their tax returns.

    The BTB unit issued notices to 312 automobile showrooms, auto parts dealers, sellers automobile workshops and car service centers doing business activity in the various areas of Karachi and they are not on tax net.

    Notices under Section 176 of the Income Tax Ordinance, 2001 have been issued to bring them into the tax net.

  • FBR explains federal excise duty on edible oils

    FBR explains federal excise duty on edible oils

    The Federal Board of Revenue (FBR) has released detailed explanations regarding the revised implementation of the federal excise duty (FED) on ghee and cooking/edible oils, as introduced through the Finance Act, 2019.

    (more…)
  • FBR extends return filing date up to August 09

    FBR extends return filing date up to August 09

    ISLAMABAD: Federal Board of Revenue (FBR) has extended the last date for filing income tax returns for tax year 218 up to August 09, 2019.

    The FBR on Friday issued Circular No. 09 for extension in date of filing of income tax returns/statements for tax year 2018.

    The FBR announced to further extend the last date for filing income tax returns and statements for tax year 2018 for salaried persons, business individuals, Association of Persons and Companies up to August 09, 2019.

    The previous extended date for filing income tax returns was August 02, 2019.

  • FBR issues tax rates for income from immovable properties

    FBR issues tax rates for income from immovable properties

    ISLAMABAD: Federal Board of Revenue (FBR) has issued withholding tax rate on rental income of immovable properties, which are applicable from July 01, 2019.

    The FBR issued withholding tax card for tax year starting July 01, 2019, and said that every prescribed persons (withholding agents) shall collect withholding tax under Section 155 of Income Tax Ordinance, 2001 at the time of receipt of rent of immovable property at the time the rent is actually paid.

    The FBR said that the tax shall be adjustable. The withholding tax shall be deducted at the following rates:

    A. In case of individual or Association of Persons (AOPs)

    1. Where the gross amount of rent does not exceed Rs, 200,000: No tax shall be deducted.

    2. Where the gross amount of rent exceeds Rs, 200,000 but does not exceed Rs, 600,000: 5% of the gross amount exceeding Rs, 200,000

    3. Where the gross amount of rent exceeds Rs, 600,000 but does not exceed Rs, 1,000,000: Rs, 20,000+10% of the gross amount exceeding Rs, 600,000.

    4. Where the gross amount of rent exceeds Rs, 1,000,000 but does not exceed Rs, 2,000,000: Rs,60,000+15% of the gross amount exceeding Rs, 1,000,000.

    5. Where the gross amount of rent exceeds Rs, 2,000,000 but does not exceed Rs. 4,000,000: Rs, 210,000+20% of the gross amount exceeding Rs, 2,000,000.

    6. Where the gross amount of rent exceeds Rs.4,000,000 but does not exceeds Rs. 6,000,000: Rs.610,000 plus 25 per cent of the gross amount exceeding Rs.4,000,000.

    7. Where the gross amount of rent exceeds Rs.6,000,000 but does not exceeds Rs. 8,000,000: Rs.1,110,000 plus 30 percent of the gross amount exceeding Rs.6,000,000.

    8. Where the gross amount of rent exceeds Rs.8,000,000: Rs.1,710,000 plus 35 percent of the gross amount exceeding Rs.8,000,000.

    B. The FBR said that in case of company the tax rate shall be 15 percent.

    The FBR further explained that as per Finance Act, 2019, the provisions of newly inserted 10th schedule of the Income Tax Ordinance, 2001 shall not apply on tax rental income deducted under section 155.