Pkrevenue.com

Tag: KTBA

  • KTBA recommends daily update of ATL file; banks not relying on online verification

    KTBA recommends daily update of ATL file; banks not relying on online verification

    KARACHI: Karachi Tax Bar Association (KTBA) has advised the Federal Board of Revenue (FBR) to update Active Taxpayers List (ATL) on daily basis instead weekly as banks were not relying on the online verification of the active taxpayers for purpose of withholding tax deduction.

    The KTBA on Saturday said that many taxpayers are making payment of surcharge U/s.182A of the Income Tax Ordinance, 2001 (Ordinance) for inclusion of their names in the ATL and upon the payment the status of taxpayer is immediately updated in the ATL on the web portal.

    However, the excel file available on the FBR web portal of is not being updated which is causing severe problems to the taxpayers as far as withdrawals from banks are concerned.

    “The banks are not relying on the online verification available on the web portal of FBR,” the KTBA said.

    The KTBA suggested that the excel file (lists) available on the web portal of FBR is updated on daily basis and the banks are also informed to rely on the online verification before withholding deducting the tax on banking transactions in order to facilitate the taxpayers.

    The tax bar said that it had received many complaints that where manual extensions were filed/submitted and where no reply was received (whether granted or refused) and the returns were filed within the time applied for; the names of such taxpayers are also not appearing in the ATL though such cases are liable to be treated as filed within the time allowed.

    The KTBA advised that where taxpayers have filed the manual extensions within time and where the returns have been filed within the time applied for, the names of such taxpayers should be included in the ATL and the ATL be updated immediately without payment of surcharge as prescribed U/s.182A of the Ordinance.

    There are several instances where the taxpayers have opted rightly to file their returns, in time, manually (paper returns) as they were legally not bound to file their returns electronically, their names are also not appearing in the ATL for which we are being informed by our members continuously. We feel that the manual returns have not been digitized and such taxpayers are facing severe problems due to non-appearance of their names in the ATL.

    The tax bar suggested that where taxpayers have rightly filed/submitted their returns manually (paper turns), the names of such taxpayers should be included in the ATL forthwith for their facilitation.

    The KTBA also received complaints from members and have also noticed that there are instances where extension applications have been submitted via IRIS within time and the same are appearing in the outbox of IRIS unattended by the concerned Commissioners and the returns have also been filed within the time applied for but their names are not appearing in the ATL.

    The tax bar said that there is no fault of the taxpayers who have filed the extensions in time that remains unattended and the returns have also been filed within the time applied for.

    It suggested that where taxpayers have applied for extensions on IRIS in time, whose applications have remained unattended and the returns have been filed within the time, the names of such taxpayers should also be included in the ATL forthwith for their facilitation

  • KTBA urges FBR to issue form for updating taxpayers’ profile

    KTBA urges FBR to issue form for updating taxpayers’ profile

    KARACHI: Tax practitioners have urged the Federal Board of Revenue (FBR) to issue form for updating taxpayers’ profile and provide suitable time for making compliance.

    In a letter sent to Member Inland Revenue (Operations) FBR, the KTBA said that the last date for updating taxpayers’ profile is December 31, 2020 but the prescribed form is still not issued.

    Although, the FBR issued draft rules for updating profile through SRO1341(I)/2020 on December 16, 2020 but the finalized format is still awaited, said KTBA President Muhammad Zeeshan Merchant.

    The KTBA president said that the prescribed form as mentioned in clause (a) of sub-section (2) of Section 114A of the Income Tax Ordinance, 2001 has still not been issued and or made available on IRIS.

    “It was, though, discussed in our meeting at length and also agreed by your goodself that when the information sought under section 114A of the Ordinance is already available on IRIS in the registration form under Section 181 of the Ordinance, this new form would simply be a repetitive and arduous exercise in the presence of the information already available on IRIS (in the form under section 181), the KTBA president told the Member.

    In addition to above, Merchant said that it was also discussed that as and when the form is prescribed, the timelines available under the Ordinance would suitably be extended/amended accordingly and at least 90 days time would be given from the date of the form is prescribed. “It is needless to say that for the form to be prescribed and uploaded on IRIS, has first to be issued in draft form for public seeking comments and objection, if any, and after that only the said form can be legally prescribed or notified.”

    Considering the issue, the KTBA requested the Member to immediately take urgent measures to prescribe the said form as soon as possible and also provide/allow proper time available under the law which is minimum for 90 days which is not only the right of the taxpayers but at present also genuinely needed as the delay is not part of the taxpayers.

  • KTBA declares online income tax return form as defective

    KTBA declares online income tax return form as defective

    KARACHI: Karachi Tax Bar Association (KTBA) on Thursday declared the available income tax return form at IRIS – the web portal of Federal Board of Revenue (FBR) – as defective and taxpayers are unable to file their returns for tax year 2020.

    “Needless to state that the return of income is still defective and incomplete as certain fields are missing to date. The time prescribed of 90 days under Section 118 to file return will not start until all defects in the return of income are completely removed and the return is error free and taken to have been finalized,” the KTBA said in a letter sent to the FBR chairman.

    It is pertinent to mention here that the last date for filing income tax returns for tax year 2020 was September 30, 2020. The FBR finalized the return form on September 08, 2020. On the demand of tax bars the FBR extended the last date by 90 days to December 08, 2020.

    The tax bar further said that to incorporate/correct certain fields/errors, appropriate Rules needs to be amended which can only be made through a notification as required under section 237(3) of the Income Tax Ordinance, 2001, the KTBA added.

    Muhammad Zeeshan Merchant, President, KTBA in its letter to the FBR chairman said that the incorrect computational issues in the return of income still persist and members were facing severe difficulties and were in extreme pressure because of two main situations, which are:

    (1) they cannot file the returns on the forms presently available on the IRIS, with wrong formulas, calculating erroneous tax; and

    (2) resurgence of the currently ongoing, since many past days, the dangerous life threatening second wave of COVID-19 which has not only gripped the taxpayers but have also affected the members of KTBA in particular and tax consultants in general and their staff.

    The KTBA through its letter explained in detail about the incorrect computation of tax under various heads of income.

    The tax bar said that the members were working very hard during such extraordinary extreme and testing time, however, due to non-removal of above irritants and rising COVID-19 cases, the members are unable to file their returns of income which could transpire in low number of returns that have been filed till date.

  • Tax bar opposes making phone SMS as mode of service

    Tax bar opposes making phone SMS as mode of service

    KARACHI: Karachi Tax Bar Association (KTBA) on Tuesday opposed making mobile phone SMS as a legal mode for serving notices.

    (more…)
  • KTBA identifies flaws in online tax return filing

    KTBA identifies flaws in online tax return filing

    KARACHI: Karachi Tax Bar Association (KTBA) on Saturday said that it has detected calculation errors on the online return filing portal of the Federal Board of Revenue (FBR).

    In this regard the tax bar sent a letter to Dr. Muhammad Ashfaq, Member Inland Revenue (Operations), Federal Board of Revenue (FBR) apprising him that the issues were discussed with o November 17, 2020 but the problems were same unresolved till to date.

    It is pertinent to mention that the last date for filing income tax return is December 08, 2020. Such problems may adversely affect the total number of return filing.

    The tax bar in its latest letter to the Member IR Operations highlighted the same issues for early resolution for smooth return filing.

    The tax bar said that IRIS Portal was not correctly calculating the tax on Behbood Saving Certificate and others. It said that till today working of tax on yield from Behbood Saving Certificate or Pensioners Benefit Account and Shuhada Welfare Account is still incorrect where average rate of tax exceeds 10 percent of total income.

    The tax bar suggested that to show the yield as a separate block of income in order to avoid the calculation issues.

    The KTBA said that minimum tax calculation was also showing incorrect working. The tax bar suggested that for tax year 2020, there has been a paradigm shift in taxation of incomes previously taxed under final tax regime and now are being taxed at minimum.

    “Although, the law had been amended yet there are not instructions given by the FBR as to how to cater to these situations.”

    Working under these situations is showing incorrect tax amount which renders the return defective and there is need to correct the working, the tax bar added.

    The tax bar highlighted issue in tax deducted/paid under Section 233A by a stock exchange registered in Pakistan, and said they were unable to claim tax deducted/paid in case of sale/purchase of shares under section 233A of the ordinance as the same is not available in adjustable tax regime. The tax bar suggested to provide the column for the tax year 2020.

    Similarly, in case of tax deducted/paid under section 236W on purchase of immovable property, it said that they were unable to claim tax deducted/paid in respect of property purchased before June 30, 2019 and tax under section 236W of the Ordinance is paid subsequently i.e. during the tax year 2020; as the same is not available in description/heads of Final Tax Regime (FTR)/Minimum Tax Regime (MTR).

    Therefore, it is suggested to provide the column for the tax year 2020.

    The KTBA pointed out that through Finance Act, 2019, tax regime for various income entities was changed from FTR to Minimum Tax. Accordingly, entities following special tax year are required to file January-June under FTR and July – December under minimum tax. However, IRIS portal does not cater for such situation.

    “For the income stream having special tax year where taxation regime is changed from final tax to minimum tax, the IRIS portal should cater both regimes,” the KTBA suggested.

  • Tax offices issue notices for already filed return of income

    Tax offices issue notices for already filed return of income

    KARACHI: Tax offices are issuing notices to a number taxpayers for filing income tax returns of past years, where the taxpayers have already made compliance.

    (more…)
  • KTBA protests over ex-parte tax orders against COVID patients

    KTBA protests over ex-parte tax orders against COVID patients

    KARACHI: Karachi Tax Bar Association (KTBA) on Wednesday protested over ex-parte order passed by tax offices despite taxpayers, who tested positive for coronavirus, applied for adjournment.

    The KTBA in a letter sent to Member Inland Revenue (Operations) of Federal Board of Revenue (FBR), said that the field formations of FBR are not considering requests from taxpayers/authorized representatives (ARs) for adjournment of hearings/compliance and are adamant to proceed ex-parte/enforce personal hearings.

    “The bar has also received complaints from our members that in some of the cases, ex-parte orders have already been passed where taxpayers/ARs were observing self isolation and were quarantined for having contracted Covid-19 and were unable to attend hearing notices.”

    The KTBA believes such actions of passing ex-parte orders are totally against the spirit of facilitation and will be detrimental to the image of FBR. “Additionally, passing of such orders will not achieve any objective but would not also stand test of appeals.”

    The tax bar demanded the FBR of equity and fairness and urged the Member to direct field formations to refrain from passing orders where ARs / taxpayers have requested for adjournments and are isolated due to Covid-19 cases.

    The Member has also been urged to direct the field formations to recall all such orders passed ex-parte in the absence of taxpayer/ARs by taking recourse of Section 122A of Income Tax Ordinance, 2001 and Section 45A of Sales Tax Act, 1990 and oblige.

    As aware, coronavirus (Covid-19) pandemic has hindered the mobility of people severely across the world who now largely prefer to work/liaise online due to health reasons.

    Pakistan is no exception and is currently experiencing a second wave of this malaise. Keeping in view of the rising trend Covid-19 cases, provincial governments have already issued SOPs to minimize/limit social contact and to stop the spread of Covid-19 cases.

    It is worth mentioning have that the Government has very recently directed that 50 percent of the office staff shall work from home as the Covid-19 cases are rising rapidly.

    The tax bar also invited the Member’s attention that presently all the members of KTBA fraternity are heavily occupied in their National responsibility i.e. preparation and filing of tax returns for the Tax Year 2020.

    In this situation issuance of notices (audit, monitoring, amendments etc.) with a very short compliance date is against the principles of natural justice and fair play.

    It is also worth mentioning to add that Chief Commissioners Inland Revenue at Karachi had assured of their fullest cooperation and vowed to take immediate all the remedial action in the event of any mishandling for which we are grateful.

    The KTBA urged the Member to direct the field formations to strictly follow SOPs issued by the government to combat the spread of Covid-19 and also direct the officers to suspend issuance of all notices till December 08, 2020 (last date of filing of returns) and where ex-parte orders have been passed (where intimation / adjournments were available) recall such orders.

  • KTBA demands time relief for submitting annexures H, F

    KTBA demands time relief for submitting annexures H, F

    KARACHI: Karachi Tax Bar Association (KTBA) on Wednesday demanded the tax authorities to condone time-limit for submitting annexures ‘H’ and ‘F’ of monthly returns for claiming sales tax refunds.

    The tax bar in a letter to Member Inland Revenue (Operation) of Federal Board of Revenue (FBR), said that a large number of taxpayers had failed to rectify the details of their stock position through annexure ‘H’ and value addition through annexure ‘F’. Due to this sales tax refund was stuck up since July 2019.

    The tax bar urged the tax authorities to grant general condonation of 60-day time to taxpayers for filing revised annexures ‘H’ and ‘F’ of sales tax returns related to tax periods from July 2019 onwards to e-file pending refunds claims.

    In a letter sent to the Dr Muhammad Ashfaq Ahmed, Member IR (Operations), KTBA appreciated the efforts of the FBR to ensure speedy liquidation of sales tax refunds in consonance with Prime Minister’s Covid -19 Relief Package.

    The tax bar highlighted that due to prolonged pendency, there were anomalies in annexures F and H and gaps and contradictions in its supporting documents had rendered a sizeable quantum of refund claims pending with the FBR, and all such taxpayers required to file revised Annexures F and H from July 2019 on a sequential basis.

    Although the Commissioner Inland Revenue empowered to condone such cases under section 74 of the Sales tax Act 1990 but the KTBA sought a general condonation and extension of time limit.

    The KTBA said that it would help the taxpayers to file annexures F and H without wastage of time.

  • KTBA highlights problems in FBR’s online correspondence system

    KTBA highlights problems in FBR’s online correspondence system

    KARACHI: Karachi Tax Bar Association (KTBA) on Tuesday pointed out various problems in the online correspondence and notice system of the Federal Board of Revenue (FBR).

    Muhammad Zeeshan Merchant, President, KTBA sent a letter to Dr. Muhammad Ashfaq Ahemd, Member Inland Revenue (Operations) for early removal of difficulties to facilitate taxpayers.

    The tax bar held a meeting on October 17, 2020 with the Member IR Operations and discussed the issues. The Member had asked the tax bar to identify and submit a brief list of issues being faced by the taxpayers in general in respect of IRIS notice and subsequent correspondence.

    The tax bar in its instant letter said that the mechanism for online correspondence available on the IRIS web portal for the compliances of Income Tax audits / assessments, covers the whole catena of proceedings, right from the issuance of notices, show cause notices to the final assessment order / notice of tax demand takes place on the above given online web portal of the FBR. This has been in vogue from the Tax Year 2014 and onwards.

    The KTBA identified following issues in the online correspondence system of the FBR:

    1) NEW NOTICE / CORRESPONDENCE:

    Presently, as per the applicable features of the web portal, all the notices and new correspondence from the tax authorities are expected to appear under Tab / Caption “Inbox”.

    As soon as any online notice / correspondence is made available in the inbox of the taxpayer online ID, it is expected that a separate intimation is issued to notify the development through SMS on the registered cell phone number and on the registered Email ID of the taxpayer. Although, this procedure is being followed in some cases, however, we expect that the same should be followed in all the cases.

    2) FOLLOW-UP NOTICE / ASSIGNMENT / CORRESPONDENCE:

    As mentioned above, the Email and SMS are being sent in some cases where fresh/new notices are issued, however, this feature of notification through SMS and Email is apparently limited to the development made through inbox only, which means that any subsequent development made by the tax officer through creation of task assignment feature or otherwise, is not presently being notified through SMS and Email.

    The absence of this notification, understandably, is creating a severe hardship to the taxpayers and the same is actually resulting in hindrance in ensuring the requisite timely compliance of these notices including but not limited to show-cause notices.

    Based on recent experiences of both KTBA Members and the taxpayers, the date of compliance of notice is generally fixed through assignment of notice (i.e. without any notification through SMS, Email and Registered Post/Courier) instead of a notice / letter in inbox, which has resulted eventually in completely unwarranted ex-parte orders in certain cases.

    The tax bar said that the issue can be resolved conveniently if all the correspondence are made by the concerned tax officers mandatorily through inbox feature with a proper notification to the taxpayer through SMS, Email and Registered Post/Courier or if a similar feature of notification through SMS and Email is linked to the assignment of notice as well and there must be a pop-up window with “New Correspondence Available” with link of the destination mentioned in the pop-up window.

    3) CREATION OF NEW TASK IN ASSIGNMENT IS NOT AVAILABLE NOW WHICH PREVIOUSLY WAS AVAILABLE:

    Recently, we have noted that under the “Assignment Tab” of follow-up correspondence, although there is an option for the taxpayers to reply, however, the new task could not be created which is resulting in non-compliance on IRIS system. The taxpayers are then compelled to submit a manual reply which is causing hindrance and the compliance does not reach to the concerned tax officer in time.

    Similarly, there is no option of partial compliance in the IRIS system. Presently, there is an option for adjournment or reply only, which sometimes creates problems in making compliances in a phased-wise manner for the taxpayers.

    4) ATTACHMENT – FILE SIZE AND FILE FORMAT:

    Another limitation which is generally being faced while e-filing the online response on the web portal is that the attachment size cannot exceed 5 MB file size (for a single file). Further, JPEG or any editable file format can only be attached on the web portal while filing a response through a assignment tab which means that other format (including PDF) cannot be attached. The said limitation are creating nuisance to the taxpayers.

    5) ONLINE SUBMISSION VIA ASSIGNMENT TASK

    Presently, there is no separate “submit button” available for submission of online response via assignment tab on the web portal. The response through assignment tab is submitted as soon as the response is saved online on the web portal, which creating nuisance to the taxpayers.

    6) CORRESPONDENCE IS NOT REACHING TO THE CONCERNED TAX OFFICER ON IRIS

    The bar members informed the tax bar that the reply submitted online on the IRIS web portal in response to a notice issued by a particular tax officer is delivered to another tax officer on the web portal due to certain technical issue. Thus, the compliance of the notice is apparently not reaching to the relevant tax officer for review and perusal. The same is resulting in an unnecessary hassle to the taxpayers and an uncertainty regarding the compliance of the notice.

    SOLUTION / RECOMMENDATION:

    Keeping in view the severity of the aforementioned grave issues and the resulting adverse consequences to the taxpayers, the KTBA urged the Member to urgently intervene and issue necessary instructions to all the tax offices for issuance of all the correspondence (including notice / letter) exclusively through inbox feature only with a mandatory intimation to the taxpayer through SMS, registered Email and registered post/courier.

  • KTBA demands date extension for filing sales tax return

    KTBA demands date extension for filing sales tax return

    KARACHI: Federal Board of Revenue (FBR) has been informed that many taxpayers were unable to file their sales tax returns for September 2020 as FBR’s web-portal was stopped functioning.

    Muhammad Zeeshan Merchant, President, Karachi Tax Bar Association (KTBA) in a letter on Monday apprised Muhammad Javed Ghani, Chairman, FBR about the malfunctioning of FBR’s web portal, which deprived many taxpayers in filing their sales tax returns for the period of September 2020.

    The FBR chairman was informed that KTBA members had faced immense problems in e-filing the monthly sales tax return for the tax period of September 2020 which was due on October 18, 2020.

    Merchant said that due to non-working of FBR web-portal for the last few days and it completely stopped functioning on Saturday October 17, 2020 and Sunday October 18, 2020.

    The KTBA president also highlighted that many of the CPRs which were paid by using ADC-payment option were not reflecting in banks folders and consequently taxpayers were unable to upload their tax challans and therefore were unable to e-file the sales tax return for the tax period ‘September 2020’.

    “Our members are also upset because they were not even in a position to apply for extension either manually or online as there is no provision available,” the KTBA president said.

    The FBR chairman has been urged to extend the date of e-filing the monthly sales tax return for the tax period ‘September 2020’ at the earliest to facilitate bar members and the compliant taxpayer to fulfil their legal obligation properly.