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Tag: PTBA

  • Glitches mar filing of national sales tax return

    Glitches mar filing of national sales tax return

    LAHORE: The Federal Board of Revenue (FBR) has failed to rectify errors in national sales tax form as large number of taxpayers unable discharge their liabilities.

    Pakistan Tax Bar Association (PTBA) in a letter to the chairman of Federal Board of Revenue (FBR) highlighted the issues in the national sales tax return and demanded to extend the date for filing monthly returns for the months of December 2021 and January 2022.

    READ MORE: FBR further extends date for filing sales tax return

    Earlier this month the PTBA highlighted the issues. A committee comprising PTBA General Secretary Ch. Qamar uz Zaman and another person Zahid Ateeq Choudhry pointed out the following issues:

    »             Entering data in Annex-H is not functioning properly, especially, opening stocks are not available for consumption.

    »             Zero rated purchases for the month are not transferred in Annex-F for consumption, hence, creating discrepancy in relation to refund claim as well as income tax declaration.

    »             FASTER rules for pharma industry, which is made subject to zero rated regime through Finance (Supplementary) Act, 2022, are not given until the date. Hence, the industry is unable to file refund claims.

    READ MORE: Single sales tax return to eliminate fake, flying invoices

    »             Input invoices once claimed are again available for reclaim in Annex-A. Hence, double claim of same input tax shall cause loss to the revenue.

    »             Search option in Annex-A is limited to 100 invoices, only. It should search all invoices for the month so that hassle be reduced or eliminated.

    »             Reduce rate sales entered through “sales invoice template” are not validated due to error “rate id is missing” despite proper reduced rate is provided in relevant data field.

    »             Sales entered through “sales invoice template” are not editable.

    READ MORE: FBR launches sales tax return filing through single portal

    »             Option to undo “sales invoice template” once uploaded should be available, which helps in undoing mistake, especially in large number of invoices, presently have to be done one-by-one.

    »             Sales tax Withheld by Government departments are not still available for claim.

    »             In Annexure-C “Retail Consumer” Type is not available.

    »             Sales Related to POS along with manual entry sales without POS, if added through invoice management, manual entries are not loaded in Annexure-C.

    »             Exclusion from 8B in return column # 24 is not available, in many cases which does not fall in any of the STGO’s of POS integration but also disallowing the input credit as POS retailer.

    »             Exporter cum manufacturer, where refund amount or credit to be carried forwarded are shown in decimal.

    Issues in connection with Provincial Sales Tax Return for Services:

    READ MORE: Power of the Board and Commissioner to call for records

    »             The National Sales Tax Return is not transmitting data relating to supplies of goods to the taxpayers registered for sales tax on services despite the fact their suppliers have duly filed their National Sales Tax Returns, hence, service providers are deprived of their legitimate adjustable input tax claim.

    In the light of the aforesaid facts and legal exposition, the date of filing of Sales Tax Return for the Tax Period December-2021 and January-2022 should be extended up to February 25, 2022.

  • PTBA demands date extension for filing sales tax return

    PTBA demands date extension for filing sales tax return

    ISLAMABAD: Pakistan Tax Bar Association (PTBA) on Tuesday demanded the tax authorities to extend the last date for filing sales tax return for the month of December 2021 because taxpayers have failed to make compliance due to technical issues on the IRIS portal.

    The PTBA in a letter to the chairman of Federal Board of Revenue (FBR) informed about the glitches in filing the sales tax return or National Sales Tax Return and urged to extend the date for filing the monthly return for the period December 2021 up to February 15, 2022.

    READ MORE: FBR further extends date for filing sales tax return

    The actual cutoff date for filing sales tax return for December 2021 was January 18, 2021. However, due to problems on the national tax portal, the FBR extended the date twice; first extended up to January 24, 2022 and later it was further extended up to January 28, 2022.

    Rana Munir Hussain, President, PTBA in its letter to the FBR chairman appreciated the initiative of single sales tax return for all federal and provincial taxpayers. However, at the same time he pointed out some challenges pertaining to IRIS system, which are still creating difficulty/issues due to the newly introduced IRIS module.

    The PTBA received many request from its affiliated tax bars to take up the matter with FBR for extension in time for filing of Sales Tax Return for the Tax Period December-2021. All these written as well as verbal requests are revolving around the IRIS module technical issues, slow response of the system, errors and glitches on the part of FBR being faced by the taxpayers as well as professional/legal fraternity while filing Sales Tax Return through IRIS, without removing the pointed out inter alia, filing of correct sales tax returns is not possible, with the request to take up this matter on priority basis and matter in detail, is being discussed hereunder:

    Name of Person is appearing instead of business name, whereas a business is registered instead of person under the sales tax law, which is creating hardship to identify the person/business entity.

    Exclusion from 8B is not available where 80% sales of goods have been made under 3rd Schedule of the Sales Tax Act, 1990.

    Withholding Sales Tax (WHST) credit is not available.

    Revised return Tab is not available.

    Sales Tax Rate for vehicle below 1000CC @ 12.5% is not available.

    Registration Number editing facility is not available, which leads to deletion and re-entry of data/invoice.

    Sales tax return filed by the individual taxpayer, where entries have been made through NTN, input credit to buyer is not available, which is causing hardship to file the return. 

    Sales or purchase invoices are not in chronological order (invoice number & date), which is difficult task to verify/re-check/reconcile the shuffled data/invoices. 

    Figures are shown in decimal numbers, which creates confusion at the time of calculating liability or verify the data/invoices.

    Annexure-F is calculating double VAT (value Addition charged at import stage to commercial importer) or giving double credit of VAT, which will result into loss to National Exchequer.

    No effect of debit or credit note is allowing the IRIS system (sales return shall be reported in Annexure-C (reduction in sales/sales tax payable), whereas purchase return shall be reported in Annexure-A (reduction in purchase/input tax credit).

    Printing of return on three pages instead of one page (without annexures), a sheer wastage of national resources and loss of foreign exchange due to use of imported paper.

    Printing of return without annexures is useless.

    In the light of the aforesaid facts and legal exposition, the date of filing of Sales Tax Return for the Tax Period December-2021, the PTBA said, and demanded to extend the date up to 15th day of February 2022.

    READ MORE: KTBA highlights anomalies in single sales tax return

  • PTBA criticizes third-party audit of taxpayers

    PTBA criticizes third-party audit of taxpayers

    Pakistan Tax Bar Association (PTBA) has expressed concerns over decisions of the authorities to conduct audit of taxpayers through external auditors.

    In a statement, the apex tax bar of the country, expressed concerns over the decision taken by the Federal Board of Revenue (FBR) regarding the assignment of cases of Income Tax, Sales Tax and Federal Excise Duty to the third-party auditors for conducting audit of the taxpayers’ affairs.

    READ MORE: PTBA highlights taxation problem of NPOs, Trust

    The PTBA said that the cases of those taxpayers were selected for audit, who had filed the returns of income tax and sales tax voluntarily. “Conducting third party audit of such taxpayers will result to open doors of corruption.”

    Additional cost of which will have to be borne by the taxpayers, who are already on tax role and paying their taxes voluntarily.

    READ MORE: PTBA declares implementing digital payment not practical

    PTBA President Rana Munir Hussain in the statement said: “It will also increase the cost of doing business, which will lead to increase in inflation.”

    The FBR decision will also give a negative message to the general public that either the field formation of the FBR is not trustworthy or incompetent. “The FBR should also take lesson from its past decision/experience when the same idea was failed badly.”

    The decision for referring the audit to third parties will also be conflict of interest as most of the audit firms appearing on the panel of the FBR are also engaged in tax practice.

    READ MORE: Extend date for return filing till Dec 31, PTBA asks FBR

    “The FBR instead squeezing the taxpayers, who are already on the tax role, should focus on the recovery of due tax from 25 million persons who admittedly are earning millions of rupees but contributing nothing to national exchequer.”

    Further, the PTBA said that there was not need to promulgate the Finance Supplementary Act, 2022. “It will adversely affect the financial position of general public and increase the cost of living of common men, those are already suffering due to the pandemic and will further increase the inflation in the country.”

    READ MORE: FBR authorized to appoint special panels for tax audit

  • PTBA highlights taxation problem of NPOs, Trust

    PTBA highlights taxation problem of NPOs, Trust

    KARACHI: Pakistan Tax Bar Association (PTBA) has highlighted problems faced by Non-Profit Organizations (NPOs) and Trust in changing their status as envisaged under Income Tax Ordinance, 2001.

    The PTBA said on Saturday it has sent a letter to the chairman of the Federal Board of Revenue (FBR) in this regard.

    The tax bar pointed out an important aspect, which needs a prompt response from the FBR regarding the change in the definition of ‘company’ vide amendment made in section 80(2)(va) and (vb) through Finance Act, 2013:

    “(va) a non-profit organization;

    (vb)  a trust, an entity or body of persons established or constituted by or under any law for the time being in force”

    Earlier to this amendment, such organizations were assigned the status of “AOP” by the FBR.

    After the said amendment the status of all such organizations should be changed from AOP to Company. But due to systemic error existing in IRIS; a number of such organizations still have the status of AOP in the IRIS system.

    A number of such organizations have applied for approval under section(s) 2(36)/100C of the Income Tax Ordinance, 2001 but these have not been processed due to the reason that these organizations are not appearing in the folder of the relevant Commissioner of Corporate Tax Offices (CTOs), who has been assigned the power of approval under section 2(36)/100C of the Income Tax Ordinance, 2001.

    In the light of the above-stated facts, the PTBA urged the FBR chairman to issue necessary instructions to PRAL to change the status of all such organizations from AOP to Company, so that the concerned commissioners can process the applications filed under section(s) 2(36)/100C of the Income Tax Ordinance, 2001.

    PTBA declares implementing digital payment not practical
  • FBR defers digital payment provision for one month

    FBR defers digital payment provision for one month

    ISLAMABAD: The Federal Board of Revenue (FBR) has deferred the implementation of a digital mode of payment for one month.

    The digital mode of payment has been made mandatory for the corporate sector, which was to be implemented from November 01, 2021.

    The FBR issued Circular No. 09 of 2021-22 on Monday to allow an extension in the deadline for implementation of digital mode of payment up to November 30, 2021.

    The new provision was introduced through Tax Laws (Third Amendment) Ordinance, 2021.

    The FBR in its explanation through Circular No. 07 dated September 23, 2021 said: to improve documentation, a new clause (la) has been inserted in section 21 of the Ordinance.

    Previously payments under a single head account exceeding two hundred and fifty thousand rupees, made by any taxpayer were required to be made through crossed cheque or crossed baking instruments including digital payments.

    “Through this amendment, payments made by a company under a single head of account exceeding two hundred and fifty thousand rupees other than by digital means from business bank account of the taxpayer notified to the Commissioner under section 114A of the Ordinance shall not be admissible as deductions.”

    However, certain expenditures on account of utility bills, freight charges, travel fare, and payment of taxes and fines would continue to be admissible even though paid in cash or via traditional banking instruments.

    The purpose behind this legislative enactment is to encourage digital payments and discourage traditional mode of transactions by the corporate sector in the first phase.

    However, owing to lack of total digital readiness by some corporate taxpayers, the corporate taxpayers are allowed to switch to this mode w.e.f. 01.11.2021.

    In the intervening period they may use digital payments or continue with the existing procedure of making payments by a crossed cheque drawn on a bank or by crossed bank draft or crossed pay order or any other crossed banking instrument showing transfer of amount from the business bank account of the taxpayer.

    Furthermore, any salary paid or payable exceeding twenty five thousand rupees per month has to be made through cross cheque or direct transfer of funds to the employee’s bank account under clause (m) of section 21 of the Ordinance. In order to bring this provision in conformity with newly inserted clause (la) ibid, in case of payments against salary in excess of twenty five thousand rupees per month, the mode of digital payment has been added to the available modes referred to above.

    The Pakistan Tax Bar Association (PTBA) last week in a letter to the FBR chairman stated that the implementation of digital payment was not practical at the moment.

    The PTBA made the following submissions to substantiate its claim:

    (i) It is impossible to make payment to goods carriage/transport sector by the digital means, which will create complete unrest in the goods carriage and transport sector.

    (ii) Presently, port terminal charges, wharfage charges, charges for clearance of delivery orders are paid in advance through crossed cheques or payorders. It will not be out of place to mention here that the port terminal operators and shipping lines, are unaware and are not ready for implementation of the ‘digital mode of payment.’

    (iii) It is routine business practice that advance against delivery of goods, the buyer submits its payment by way of post-dated cheques, which normally accepted by the other party and inherently a secured way of making payment. We are afraid that this law of ‘digital mode of payment’ is surely going to hamper the business activities, as it does not cater the situation and solution of such transactions.

    (iv) The similar issues are likely to arise and are to be faced by the companies for making payments to the growers of various agricultural crops such as fruits, sugarcane, rice, cotton, wheat, etc.

    (v) The various banks have fixed their own limitation on the quantity of making digital / online payments in a day and have also fixed the threshold of the amount and they do not allow to exceed the threshold limit fixed by them. In our view, this also needs a proper campaign without which the implementation of the law is not possible.

    (vi) The digital mode of payment is also impractical and is likely to affect the business transaction in the cases where petty cash payments, in aggregate exceed millions of rupees, which cannot be made digitally.

    (vii) It will not be out of place to mention that online transactions are still considered as unsecured mode, due to various type online frauds and hacking of software.

    Furthermore, a cyber attack on Pakistan’s leading bank last Friday also made the implementation in jeopardy. The PTBA has also pointed its concerns about the cyber security issue.

    FBR applies digital payment amid cyber security incident
  • PTBA declares implementing digital payment not practical

    PTBA declares implementing digital payment not practical

    Pakistan Tax Bar Association (PTBA) has demanded the Federal Board of Revenue (FBR) extend the implementation of digital mode of payment for corporate entities the system is not practical to use at present for many business entities.

    The digital mode of payment has been made mandatory from November 01, 2021. The FBR has already made necessary amendments to relevant tax laws to implement the digital payment system.

    The PTBA in its letter to FBR chairman Dr. Muhammad Ashfaq on Friday, October 29, 2021, stated that the new provision of law was promulgated through Tax Laws (Third Amendment) Ordinance, 2021, where a new sub-section (la) was inserted in Section 21 of the Income Tax Ordinance, 2001.

    “The condition for allowable expenditure through digital mean is a contradiction with the other modes of payment through banking channels, which is historically remained in practice and accepted under the provisions of the Income Tax Ordinance, 2001 and this provision of law is incorporated without taking the stakeholders into confidence and it is not practically possible for many business houses,” the PTBA said.

    The apex tax bar pointed out the following reasons that will make the new provision impractical:

    (i) It is impossible to make payment to goods carriage/transport sector by the digital means, which will create complete unrest in the goods carriage and transport sector.

    (ii) Presently, port terminal charges, wharfage charges, charges for clearance of delivery orders are paid in advance through crossed cheques or payorders. It will not be out of place to mention here that the port terminal operators and shipping lines, are unaware and are not ready for implementation of the ‘digital mode of payment.’

    (iii) It is routine business practice that advance against delivery of goods, the buyer submits its payment by way of post-dated cheques, which normally accepted by the other party and inherently a secured way of making payment. We are afraid that this law of ‘digital mode of payment’ is surely going to hamper the business activities, as it does not cater the situation and solution of such transactions.

    (iv) The similar issues are likely to arise and are to be faced by the companies for making payments to the growers of various agricultural crops such as fruits, sugarcane, rice, cotton, wheat, etc.

    (v) The various banks have fixed their own limitation on the quantity of making digital / online payments in a day and have also fixed the threshold of the amount and they do not allow to exceed the threshold limit fixed by them. In our view, this also needs a proper campaign without which the implementation of the law is not possible.

    (vi) The digital mode of payment is also impractical and is likely to affect the business transaction in the cases where petty cash payments, in aggregate exceed millions of rupees, which cannot be made digitally.

    (vii) It will not be out of place to mention that online transactions are still considered as unsecured mode, due to various type online frauds and hacking of software.

    The PTBA said that in the presence of the conventional banking transactions, the move is likely to create lots of troubles for the corporate sector.

    “It is therefore, suggested that the mandatory condition of digital mode of payment for companies should be allowed along with other conventional modes of payment for at least one year and time limit for updation of business bank accounts under Section 114 of the Income Tax Ordinance, 2001 may be extended till June 30, 2022 for the smooth running of businesses.

    KTBA highlights issues in implementing digital payments
  • Extend date for return filing till Dec 31, PTBA asks FBR

    Extend date for return filing till Dec 31, PTBA asks FBR

    Pakistan Tax Bar Association (PTBA) has urged the tax authorities to extend date for filing annual tax returns and updating business bank accounts till December 31, 2021 from September 30, 2021.

    (more…)
  • FBR urged to extend date for filing sales tax return

    FBR urged to extend date for filing sales tax return

    LAHORE: The apex tax bar of the country on Wednesday demanded the chairman of Federal Board of Revenue (FBR) to extend the date for filing monthly sales tax return due to extended Eid holidays and prevailing restrictions due to coronavirus pandemic.

    Pakistan Tax Bar Association (PTBA) in a letter to FBR chairman Asim Ahmed highlighted the problems faced by taxpayers and tax practitioners due to extended Eid holidays and third wave of coronavirus.

    The PTBA said: “The government has announced holiday from May 08 – 15, 2021 on the eve of Eid-ul-Fitr while considering current situation of the third wave of pandemic COVID-19 in the country.”

    The government has not only announced national holidays week-long holidays but also going to be made complete lockdown in the country on the recommendations of NCOC during the aforesaid period, due to increase in the number of cases on daily basis, it added.

    In this situation the working for preparation for sales tax returns as well as deposit of sales tax liability up to May 15 (which is due date of deposit of sales tax liability under the law) is not possible for the taxpayers in general, the PTBA said and added that after re-joining the offices by the public after Eid holidays from May 17 onwards, only two days would had been left for filing of sales tax returns for the tax period April 2021.

    The PTBA informed the FBR chairman that in this situation neither the taxpayers can deposit their sales tax liability within the due date nor they can prepare and submit their sales tax returns with the date as provided under the law. “Thus, time for payment of due sales tax liability as well as submission of sales tax returns, is required to be extended for at least 10 days beyond the prescribed date and time in the light of the facts.”

  • PTBA demands date extension for taxpayers profile update

    PTBA demands date extension for taxpayers profile update

    ISLAMABAD: Pakistan Tax Bar Association (PTBA) on Friday urged the Federal Board of Revenue (FBR) to extend the last date for updating taxpayers’ profile for further 90 days.

    The PTBA in a letter to FBR Chairman Muhammad Javed Ghani informed that the last date for updating taxpayers’ profile under section 214 of Income Tax Ordinance, 2001 it was made compulsory for the taxpayers to update their profile electronically containing various information such as bank account, utilities etc. Furthermore, failure to file the prescribed form will also trigger the penal provisions as well as exclusion of the taxpayer from ATL list.

    The PTBA pointed out that due to sudden surge in COVID-19 patients and lockdown by the federal and provincial governments, the tax consultants/taxpayers are unable to complete and submit their profiles till March 31, 2021 and furthermore around 2.5 million taxpayers across the country are in same process at same time which is not possible in IRIS system.

    The tax bar urged the FBR chairman to issue necessary directives to the concerned department for providing relief to taxpayers.

    Furthermore, till such time, the time limit for updating the profile under the provisions of Section 114A of the Ordinance, date should be extended for 90 days up to June 30, 2021 by using the powers granted under the Ordinance.

  • Large number of taxpayers denied active status

    Large number of taxpayers denied active status

    ISLAMABAD: Pakistan Tax Bar Association (PTBA) has informed the Federal Board of Revenue (FBR) that a large number of taxpayers who have file returns but their names are not on the new Active Taxpayers List (ATL), which was issued on March 01, 2021 for tax year 2020.

    (more…)