Islamabad, March 4, 2024 – The Federal Board of Revenue (FBR) has achieved a significant milestone by promptly disbursing all outstanding tax refunds to exporters, amounting to a staggering Rs 65 billion.
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FBR to Compensate Taxpayers with KIBOR+0.5% Interest for Delayed Income Tax Refunds
Karachi, September 7, 2023 – The Federal Board of Revenue (FBR) in Pakistan has introduced a policy to compensate taxpayers for delayed income tax refunds.
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President Alvi orders genuine tax refund cannot be refused after late filing claim
President of Pakistan, Dr. Arif Alvi, Sunday ordered that a genuine tax refund cannot be refused even after late filing of a claim.
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FBR asks taxpayers to provide IBAN for direct refund payment transfer
ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday asked taxpayers to provide IBAN of their bank accounts for receiving refund payment through online system.
FBR spokesman said that the tax body had devised a centralized system of online payment of Sales Tax, FED and Income Tax refunds directly in the bank account of the taxpayers.
For this purpose, FBR has requested the taxpayers to update their IRIS profile.
In the given bank account details area in the system, IBAN detail row is added wherein taxpayers are required to add their complete Bank’s IBAN number of same Bank Account whose details are already available in IRIS profile to receive Sales Tax, FED and Income Tax refund cheques.
FBR has advised the taxpayers to do the needful as soon as possible to avail electronic transfer facility.
Likewise, FBR has also required from the exporters to update their WEBOC profile and provide IBAN of the same Bank Account whose details are already available in WEBOC profile of the exporters to receive Custom Duty Drawback.
FBR has required the information to be provided as soon as possible to avail electronic transfer facility for Customs Duty Drawback payments.
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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________________
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Salary persons should obtain withholding income tax deduction certificates to get refund/adjustment
KARACHI: Salary persons having above threshold income for tax year 2019 should obtain certificates of withholding tax in order to get refund / adjustment after filing annual income tax returns.
There are many provisions of withholding taxes under Income Tax Ordinance, 2001 where withholding agents deduct tax, which are adjustable against tax liability of taxpayers.
In those cases where salaried persons driving income less than threshold income are also required to file income tax returns to claim their refunds against tax deducted under withholding provisions.
For tax year 2019 the income tax return filing date is due on September 30, 2019 for salaried persons, business individuals and association of persons.
The salaried persons driving income above threshold income i.e. above Rs400,000 are required to file income tax return electronically.
For the tax year 2019, the total tax amount is Rs1,000 for full year where the taxable income exceeds Rs400,000 but does not exceed Rs800,000.
Similarly, the tax amount is Rs2,000 for full year where the taxable income exceeds Rs800,000 but does not exceed Rs1,200,000.
The FBR also prescribed tax rate for other slabs of income of salaried persons.
The FBR collect withholding tax through withholding tax agents from persons filing or not filing income tax returns. However, tax rates higher for persons those are not filing income tax returns. But in case a person is non-filer paid higher amount as withholding tax can claim refund or adjustment after filing income tax return for the tax year in which the deduction was made.
The FBR collects billions of rupees as adjustable withholding tax and it deposited in national kitty as taxpayers do not bother to claim.
A taxpayer can claim all those tax deduction, which are adjustable, but after filing annual income tax return.
A person can claim refund / adjustment on tax deducted under major provisions of Income Tax Ordinance, 2001:
Section 155: tax paid made on account of rent of immovable property.
Section 156B: tax paid on withdrawal of balance under pension fund.
Section 231A: tax paid on cash withdrawal from banks
Section 231B: advance tax paid on purchase or lease of motor vehicles.
Section 235A: tax paid on electricity consumption by domestic consumers
Section 236: advance tax paid to phone company or internet service provider
Section 236B: advance tax paid on purchase of domestic air ticket.
Section 236C: advance tax paid at the time of sale of immovable property.
Section 236D: advance tax paid on organizing function or gathering.
Section 236I: advance tax paid while paying fee to educational institutions.
Section 236K: advance tax paid on purchase of immovable property.
Section 236L: Advance tax on purchase of international air ticket.
Section 236P: Non-filer who paid tax on non-cash banking transactions can avail adjustment on filing income tax return.
Section 236R – advance tax paid on education related expenses remitted abroad.
Section 236U – advance tax on insurance premium
Section 236 Y – Advance tax on persons remitting amount abroad through payment of debit or credit card.
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Chief collector directs simplifying refund payment system
KARACHI: Mrs. Surriya Ahmed Butt, Chief Collector of Appraisement (South) has issued directives to customs authorities to simplify refund payment system.
The chief collector issued the directives in a meeting with members of Karachi Customs Agents Association (KCAA), a statement issued on Tuesday.
At the meeting the customs agents pointed out that the traders were facing immense problems in obtaining refunds as authorities were processing their claims through manual system.
They said that almost all the system of the customs clearance had been automated and urged the collector to make the refund payment through online system.
The chief collector assured the customs agents for simplifying the refund payment system.
The managing committee of KCAA headed by the President Mohammad Amin Essani and General Secretary Arshad Khurshid participated in the meeting.
This high-level meeting was also attended by the Collector of Customs MCC-Appraisement (West) Wajid Ali, Collector of Customs MCC-Appraisement (East), Dr. Nadeem Memon, Collector of Customs MCC-(Port Qasim), Mumtaz Ali Khoso alongwith the Additional Collectors of Customs of MCC-Appraisement (East) & (West).
While addressing the participants by the worthy Chief Collector South stated that collection of legitimate taxes in a friendly environment and Trade Facilitation is the main focus and top priority agenda of Pakistan Customs.
She assured their cooperation in order to resolve the issues being faced by the trade on the spot by adopting Open Door Policy at Custom House.
In the said meeting the following decisions were taken:
Refund Process: It has been decided that refund process will be simplified.
Dis-continuation of practice for manual hold by the terminal operators on auction goods released by the customs after payment of legitimate duty and taxes.
Call Documents: In order to reduce dwell time the process for call documents will also be simplified.
Review Submission Option: The Customs Authorities agreed that an option will be given to traders to opt for personal hearing directly before the concerned Deputy Collector instead of routed through PA. This will reduced the dwell time and allow timely clearance of goods.
CRF procedure. As proposed by KCAA the On-Line CRF request will be introduced in the system with the consultation of Directorate of Reforms & Automation.
Regarding Auto De-Blocking of IGM. De-blocking of IGM of late GDs filing should be done electronically.
On-Line Verification of Pak China FTA. The authenticity of Pak-China FTA Certificate should be verified through Electronic Data Exchange (EDE).
All the proposals / agenda were appreciated by the department and assure the implementation of the same for the betterment of trade facilitation.
The meeting was concluded with a vote of thanks as the decisions taken were definitely reduce the cost of doing business.
In the end of meeting Mohammad Amin Essani (President) and Arshad Khurshid (General Secretary) thanked and appreciated the prompt decisions taken by the Honorable Chief Collector South (Appraisement) and other Collectors for giving them their precious time for meeting and assure their full cooperation at any stage.
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Sales Tax Act 1990: Recovery of amount erroneously refunded
KARACHI: The officers of Inland Revenue have been authorized for recovery of refunded amount erroneously issued to taxpayer along with penalties and default surcharge.
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