ISLAMABAD, February 20, 2024 – The Federal Board of Revenue (FBR) has issued a clarification stating that female consumers can present the CNIC of their husband or father when making purchases above Rs50,000.
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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 issues withholding tax rates for sale, purchase of immovable properties
KARACHI: Federal Board of Revenue (FBR) has notified withholding tax rate for active and non-active taxpayers at the time of sale and purchase of immovable properties as amended through Finance Act, 2019 and applicable from July 01, 2019.
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No compromise on documentation of economy: FBR chairman
ISLAMABAD: Shabbar Zaidi, Chairman, Federal Board of Revenue (FBR) on Friday said that the government will not compromise documentation of economy by surrendering condition of CNIC on purchases.
He said that the condition of CNIC had been enforced on purchases above Rs50,000.
Speaking at a seminar organized by Sustainable Development Policy Initiative (SDPI) on Wednesday, he said that priority of the government was to enhance the tax net and expend tax base to documenting the country’s economy. And taxation is the only way to forward for equitable distribution of wealth, as we cannot have stabilized and equitable society unless we have a fare taxation system, he added.
The FBR chairman said that due to presumptive tax regime, we actually dissociated the taxation from the economy, where taxing the real income was out of question.
The incumbent government and the International Monitory Fund (IMF) are on the same page, as there was no disagreement by the government on the measures proposed by the IMF, especially the taxation measure, he said.
The chairman said that the government would not bow down against the pressure, protests and lame excuses of the businesses and industries.
Over the decades the policies of the successive governments make Pakistan a trading state rather a sami-manufacturing state, where the country is importing everything from mineral water to foods items and never worked-out on import substitution.
While raising the concerns over the open transit trade agreement with Afghanistan, he said the agreement was being exploited and abused by the smugglers which negatively impacted the local industry.
Pakistan needed to review this agreement and should take stringent measures to control illicit trade on Pak-Afghan border, he said.
There are around 100 thousand companies registered with the government of Pakistan, where only 60 thousands file their returns, which shows the level of tax compliance.
He said the measures taken in the current federal budget would fundamentally change the course of history of Pakistan.
The government was taking steps to redress the institutional corruption through automation of the taxation system, the Chairman FBR said.
He said that it is his responsibility to improve the tax base under the leadership of Prime Minister Imran Khan.
Hawala and Hundi have inflicted a huge loss on the country’s economy,” he said and added measures were being taken to include the middle class in the tax net.
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Withholding Tax Card: Non-ATL to pay up to 30pc tax on profit from bank deposits, saving schemes
ISLAMABAD: Federal Board of Revenue (FBR) has issued withholding tax card for tax year 2019/2020 effective from July 01, 2019 under which persons receiving profit from bank deposits or investment in national saving schemes shall pay up to 30 percent, if not on the Active Taxpayers List (ATL).
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RTO-II starts return filing facilitation drive next week
KARACHI: Regional Tax Office (RTO) –II Karachi to launch drive from next week in order to facilitate people to file their annual income tax returns.
FBR teams will set up camp offices at large corporate and government offices besides visiting markets and shopping plazas to encourage salary and business individuals to file their returns, said Badaruddin Ahmed Qureshi, Chief Commissioner, Inland Revenue, RTO-II, Karachi at a press conference on Friday.
The chief commissioner said that the purpose of the facilitation drive was to achieve 5 million income tax return filers during next few years. “The FBR has already received over 2.1 million income tax returns for tax year 2018,” the chief commissioner said.
He further added that the last date for filing income tax returns for tax year 2018 had been extended up to August 02, 2019.
He said that in order to achieve five million-milestone the FBR launched several measures to encourage / force persons having taxable income to file their returns.
The chief commissioner said that in first phase the RTO Karachi would ask large corporate entities and provincial departments to assure return filing by their employees having taxable income.
The tax office identified that employees of large organizations such as Pakistan International Airlines (PIA), National Bank of Pakistan (NBP), Pakistan Railways (PR) had taxable income but were not filing their income tax returns.
He said that the RTO-II Karachi would set up camp offices at various organizations for the enforcement of return filing. The camp offices would be set up at PIA, NBP, SSGC, Police, KMC, Water Board, Sindh Building Control Authority etc.
The chief commissioner said that the office had received details of doctors. He said that Pakistan Medical and Dental Council (PMDC) had 68,000 registered doctors out of which only 6,500 were filing annual income tax returns.
The chief commissioner said that it would be difficult to conceal transactions in future as FBR with the help of other regulators had established electronic system for information sharing.
The chief commissioner said that the FBR was facing enforcement problems due to human resource capacity but in order to ensure compliance a NGO was being engaged for the task of return filing.
He said that the tax office had get volunteers from the NGO would file returns of those who did not want to pay fee of lawyers.
A training session for those volunteers had been held recently at the tax office.
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FBR redeploys 1,650 customs officials to curb smuggling
ISLAMABAD: The Customs Wing has re-deployed and transferred 1,650 official positions to meet the challenging revenue target and particularly to control smuggling.
A statement said that in this context, a total of 180 posts in BS-16 have been re-designated while 1,568 posts in BS-16 have been redeployed across Pakistan. This shake up has not been kept limited to low grade positions but also 84 posts in BS-17 to BS-21 have also been re-deployed.
The bulk of the re-deployed customs officers have been shifted to strengthen the Customs enforcement side.
The transfer and posting orders have been issued. As a consequence of this re-deployment the Torkham corridor will become operational round the clock. The orders will enable the government to meet the demand from trade and industry to curb smuggling.
Customs automation efforts have lately been enabling it to handle more trade efficiently and reduce its reliance on human interface. Under Prime Minister’s instructions the Chairman Syed Shabbar Zaidi has instructed Customs to improve ease of doing business by expediting initiatives like implementation of WeBOC-Glo, ITTMS and trade related Pakistan Single Window.
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Withholding Tax Card: Tax rates on salary income
KARACHI: Federal Board of Revenue (FBR) has issued withholding tax card for tax year 2019/2020 effective from July 01, 2019 under which every employer paying salary to employees above threshold income shall deduct withholding tax.
According to official documents made available to PkRevenue.com, the FBR said that every person responsible for paying salary to an employee shall deduct tax from the amount paid under Section 149 of Income Tax Ordinance, 2001.
As per Finance Act, 2019, the provisions of newly inserted 10th schedule of the Income Tax Ordinance, 2001 shall not apply on tax deducted under section 149. Under the Tenth Schedule the withholding tax so collected shall be increased by 100 percent in case of persons not appearing on the Active Taxpayers List (ATL).
As per Finance Act, 2019, the salary slabs as well as tax rates have been revised with effect from 01.07.2019. As such all withholding tax agents disbursing salary are required to implement the revised tax rates from the same date.
Following are the salary slabs and rates on annual salary income:
1. Where taxable income does not exceed Rs. 600,000: the tax rate shall be 0 percent
2. Where taxable income exceeds Rs. 600,000 but does not exceed Rs. 1,200,000: the tax rate shall be 5% of the amount exceeding Rs. 600,000
3. Where taxable income exceeds Rs. 1,200,000 but does not exceed Rs. 1,800,000: the tax rate shall be Rs. 30,000 plus 10% of the amount exceeding Rs. 1,200,000.
4. Where taxable income exceeds Rs. 1,800,000 but does not exceed Rs. 2,500,000: the tax rate shall be Rs. 90,000 plus 15% of the amount exceeding Rs. 1,800,000
5. Where taxable income exceeds Rs. 2,500,000 but does not exceed Rs. 3,500,000: the tax rate shall be Rs. 195,000 plus 17.5% of the amount exceeding Rs. 2,500,000
6. Where taxable income exceeds Rs. 3,500,000 but does not exceed Rs. 5,000,000: the tax rate shall be Rs. 370,000 plus 20% of the amount exceeding Rs. 3,500,000
7. Where taxable income exceeds Rs. 5,000,000 but does not exceed Rs. 8,000,000: the tax rate shall be Rs. 670,000 plus 22.5% of the amount exceeding Rs. 5,000,000
8. Where taxable income exceeds Rs. 8,000,000 but does not exceed Rs. 12,000,000: the tax rate shall be Rs.1,345,000 plus 25% of the amount exceeding Rs. 8,000,000
9. Where taxable income exceeds Rs. 12,000,000 but does not exceed Rs.30,000,000: the tax rate shall be Rs. 2,345,000 plus 27.5% of the amount exceeding Rs. 12,000,000
10. Where taxable income exceeds Rs. 30,000,000 but does not exceed Rs.50,000,000: the tax rate shall be Rs. 7,295,000 plus 30% of the amount exceeding Rs. 30,000,000
11. Where taxable income exceeds Rs. 50,000,000 but does not exceed Rs.75,000,000: the tax rate shall be Rs. 13,295,000 plus 32.5% of the amount exceeding Rs. 50,000,000
12. Where taxable income exceeds Rs.75,000,000: the tax rate shall be Rs. 21,420,000 plus 35% of the amount exceeding Rs 75,000,000″;
The FBR said that every person responsible for making payment for directorship fee or fee for attending board meeting or such fee by whatever name called under Section 149(3) of Income Tax Ordinance, 2001 shall collect 20 percent of gross amount paid.
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Withholding Tax Card: non-ATL persons to pay 30pc tax on dividend income
KARACHI: Federal Board of Revenue (FBR) has issued withholding tax card for tax year 2019/2020 effective from July 01, 2019 under which person not appearing on the Active Taxpayers List (ATL) shall pay up to 30 percent on dividend income.
According to documents made available to PkRevenue.com, the FBR said that every person paying dividend shall collect withholding tax under Section 150 of the Income Tax Ordinance, 2001 at the time the dividend is actually paid.
The following rates shall be applicable for tax year 2019/2020:
(a) In the case of dividend paid by Independent Power Purchasers (IPPs) whereas such dividend is a pass through item under an Implementation Agreement or Power Purchase Agreement or Energy Purchase Agreement and is required to be reimbursed by Central Power Purchasing Agency (CPPA-G) or its predecessor or successor entity:
The tax rate shall be 7.5 percent and in case persons not appearing in the ATL the applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 15 percent.
(b) In cases other than mentioned at (a) above the tax rate shall be 15 percent and if persons not appearing in the Active Taxpayers’ List the rate of tax required to be deducted/collected, as the case may be, is to be increased by 100 percent of the above (as specified in the First Schedule to the Income Tax Ordinance, 2001 (updated as per Finance Act, 2019), i.e. 30 percent.
The FBR further said that special purpose vehicle, company shall collect withholding tax under Section 150A of Income Tax Ordinance, 2001 from Sukuk holders on payment of gross amount of return on investment.
On Payment of return on investment in Sukuks:
a) In case the Sukuk- holder is a company, the tax rate shall be 15 percent and if persons not appearing in the Active Taxpayers’ List the applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 30 percent.
b) In case the Sukuk – holder is an individual or an association of person, if the return on investment is more than one million, the tax rate shall be 12.5 percent and if persons not appearing in the Active Taxpayers’ List then the applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 25 percent.
c) In case the Sukuk – holder is an individual and an association of person, if the return on investment is less than one million, the tax rate shall be 10 percent and if persons not appearing in the Active Taxpayers’ List then the applicable tax rate is to be increased by 100 percent (Rule-1 of Tenth Schedule to the Ordinance), i.e. 20 percent.
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Withholding Tax Card: Tax rates on imports of goods for ATL, non-ATL persons
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FBR warns stern action against under-invoicing, mis-declaration
ISLAMABAD: Federal Board of Revenue (FBR) has decided to launch drive against manufacturers and importers indulged in under invoicing and incurring huge revenue losses to national exchequer.
FBR chairman Syed Shabbar Zaidi, in a statement, warned such manufacturers and importers to abstain from misdeclaration and under-invoicing.
The statement said that the smuggling was the greatest menace but under-invocing and misdeclaration of imported goods were also depriving the country from actual revenue collection.
The chairman warned manufacturers and importers that in case misreporting or under-invoicing was detected then stern action would be taken under relevant provisions of laws.
The statement said that smuggled goods have badly dented the local manufacturing. The prime minister noticed the huge quantum of smuggling and directed the authorities to take all measures to stop the menace.
In order to comply with the directives of the prime minister, Pakistan Customs enhanced the enforcement against illegal movements of goods.
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No unnecessary transfers of senior officials: FBR
ISLAMABAD: Federal Board of Revenue (FBR) on Thursday asked the senior officers to concentrate on their work as no unnecessary transfers and posting will be notified.
An office order issued by the FBR stated that there had been a tradition in the revenue body for en-bloc transfers and postings each financial year, especially at senior level at the beginning of each financial year.
“Henceforth, this tradition would not be made as a norm unless necessitated in the interest of revenue or reforms in the organization.”
All the senior officers and their staff should concentrate on optimal collection of due taxes, facilitation of taxpayers, expansion of tax base and identifying economic activities and business units in their jurisdiction.
“We all work as a team and shall continue to do so without affecting our ongoing efforts and efficiency,” it added.
The FBR recently notified transfers and postings of over 3,000 employees of lower cadre. This large scale transfers and postings created panic like situation in the FBR field formation and the work of duty and tax collection was almost at halt.
The senior officers were also waiting for notifications for their transfers. The revenue collection in the July 2019 witnessed sharp decline and unconfirmed sources said that the collection in the month was so far in the negative zone when compared with the same month of the last year.
The government has set a target of Rs5,550 billion as collection by the FBR during current fiscal. It is also a fact that the FBR failed to meet the revenue figures of past year of Rs3,852 billion.
In these challenge situations the transfer and postings created panic and FBR had decided to be careful in shuffling the senior officers of Inland Revenue Service and Pakistan Customs.