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ISLAMABAD: Federal Board of Revenue (FBR) has granted Rs30 billion as initial allowance to new business entities during fiscal year 2019/2020. The concession of allowance has been granted under Section 23 of Income Tax Ordinance, 2001. As per Section 23 the allowance has been granted as: Section 23. Initial allowance.— Sub-Section (1): A person who places an eligible depreciable asset into service in Pakistan for the first time in a tax year shall be allowed a deduction (hereinafter referred to as an “initial allowance”) computed in accordance with sub-section (2), provided the asset is used by the person for the purposes of his business for the first time or the tax year in which commercial production is commenced, whichever is later. Sub-Section (2): The amount of the initial allowance of a person shall be computed by applying the rate specified in Part II of the Third Schedule against the cost of the asset. [The rate of initial allowance under section 23 shall be 25 per...

KARACHI: Taxpayers shall require to pay 10 percent of tax demand while filing an appeal before Appellate Tribunal challenging the order of commissioner appeals. Deloitte Yousuf Adil, Chartered Accountants, said that a new requirement is proposed in the Finance Bill 2020 for filing of appeal before the Appellate Tribunal for challenging the order of Commissioner Appeals. Proof of payment by the taxpayer of ten percent of the amount of tax upheld by the Commissioner Appeals is required to be submitted along with the appeal documents. The chartered accountants said that currently, no such payment requirement exists for filing of appeal before the appellate tribunal. No appeal shall be admitted unless 10 percent of amount upheld by the Commissioner Appeals is deposited. The proposed amendment is against the principle of natural justice and would create cash flow problems for the tax payers considering the illegal tax demands that are generally created through assessment proceeding...

Presently, expenses incurred to the extent of 6 percent of rent chargeable wholly and exclusively for deriving rent are admissible as deduction against rental income. The Bill proposed to reduce the limit from 6 percent to 2 percent. The experts said that further reducing such limit would deprive a taxpayer for claiming a legitimate expense incurred solely for deriving taxable income and would ultimately lead to higher tax payable by the taxpayer. “It may encourage taxpayers to under-report their taxable income on the grounds that their legitimate expenses are disallowed,” experts at Deloitte Yousuf Adil Chartered Accountants said. Presently, income from property derived by an individual or an Association of Persons is subject to tax at the specified slab rates and treated as a separate block of income. However, individuals or AOPs whose income from property exceeds Rs 4 million per annum can opt to claim deductions under section 15A of the Ordinance and pay tax at normal rate...

According to budget commentary issued by PwC A F Ferguson, as part of reforms for ease of doing business, the government has proposed to withdraw following withholding tax provisions, which in government’s view were not generating enough revenues: 01. Section 148A – Tax on local purchase of cooking oil or vegetable ghee by certain persons Two percent tax was chargeable on the purchase of locally produced edible oil by the manufacturers of cooking oil or vegetable ghee. 02. Section 156B – Withdrawal of balance under Pension Fund A pension fund manager making payment from individual pension accounts, maintained under any approved Pension Fund, was required to deduct tax at the average rate of tax as calculated in section 12, from the amount so withdrawn by the pensioner before or after his retirement. 03. Section 235B – Tax on steel melters and composite units Tax under this section was required to be collected from every steel melter, and composite steel units, registered f...

ISLAMABAD: Federal Board of Revenue (FBR) has re-constituted committee for grant of license for tracking transit and transshipment cargo. The FBR on Wednesday issued SRO 542(I)/2020 dated June 08, 2020 to amend Tracking and Monitoring of Cargo Rules, 2012 The reconstitution of committee shall comprise of Director General of Transit Trade (Chairman), Director Transit Trade (I-IQs), Karachi, Director Transit Trade (Peshawar), Director Transit Trade (Quetta), Director Reforms and Automation (Karachi), Collectors of Customs (Enforcement and Compliance, Karachi), (Appraisement and Facilitation, Port Muhammad Bin Qasim, Karachi), (Appraisement and Facilitation-East, Karachi), (Appraisement and Facilitation-West), Karachi, and Director of Intelligence and Investigation, FBR, Karachi or any other authority designated by the FBR Headquarter. As per amendment the project director shall be Director (HQs), Directorate General of Transit Trade. Previously, the project director was Collector,...

KARACHI: Tax practitioners have recommended that the selection of income tax returns for audit should be rest only with the Federal Board of Revenue (FBR) and powers of commissioner in this regard should be withdrawn. “The power to select the return of income may rest only with the FBR under Section 214C of the Ordinance,” according to proposals for budget 2020/2021 submitted by Pakistan Tax Bar Association (PTBA). There is a dire need to explain the two terms in section 122(5A) of the Ordinance so that the taxpayers are not harassed in the garb of returns being ‘erroneous’ and ‘prejudicial to the interest of revenue’. The error of law or fact must be floating on the surface of the available record. The time limit for amendment of assessment under section 122(4) of the Ordinance, 2001 be reduced to two years. The commissioner once amend the original order should not have the powers amend the laws as many time as decided by him. Moreover, the combined audit of income tax,...

KARACHI: Karachi Chamber of Commerce and Industry (KCCI) on Wednesday said it will oppose any move to grant powers to tax officials regarding opening cases of past 10 years. KCCI President Agha Shahab Ahmed Khan in a statement expressed serious concern on reports that officials of Inland Revenue are seeking more powers to probe and reopen cases of taxpayers for as long as past 10 years. President KCCI pointed out that KCCI has contested for years to curtail discretionary powers of tax officials, which are a source of harassment to the taxpayers and have prevented a majority of business persons to register in the tax regime. Such powers are a deterrent to broadening of tax base which remains around 1 percent despite all kinds of coercive tactics. He said that contrary to stated goal of reforms in Federal Board of Revenue (FBR) and taxation regime, the government is being misled into taking measures in the Budget 2020-2021 which will further discourage documentation and result...

ISLAMABAD: The tax authorities have received above 120,000 income tax returns since launch of new Active Taxpayers List (ATL) on March 01, 2020 and during ongoing lockdown to prevent spread of coronavirus, according to updated list issued June 01, 2020. The updated ATL for tax, around 120,000 taxpayers filed their annual returns for tax year 2019 since March 01, 2020. The number of active taxpayers increased to over 2.65 million as of May 31, 2020 from 2.53 million returns as shown in new ATL for tax year 2019. The FBR updates ATL every week and on an average the revenue body receives around 20,000 returns per week. However, due to lockdown in the country after the outbreak of coronavirus the number of financial transactions had fallen drastically. It is worth mentioning that additional 120,000 income tax returns have been filed after the due date. The due date for filing income tax returns for tax year 2019 was February 28, 2020. As per law it was mandatory for individual...

Every person in the above-mentioned categories and who does tax-exempt activities in Pakistan is legally obliged to obtain sales tax registration. However, for tax assets granted in any tax during the last 12 months ending any tax does not exceed 10 million rupees or those used annually (telephones, gas and electricity) in the last 12 months ending any tax. do not exceed Rs. 800,000. How Can You Pay Your Tax Return ? According to the law every subscriber must submit a no later than 15 monthly installment in respect of sales made in the previous month. Every registered person is obliged to submit the forms electronically; in such case the complaint should be made by the 15th and the return may be filed on the e-portal conducted by the Federal Board of Revenue (FBR) on the 18th. Recommended Blogs How to become filer How to check NTN number How to check FBR filer status

If you are currently in the college financial aid process, you may be selected for Verification, a process that requires you to submit tax documents (and possibly other documents) to the college's financial aid offices. If you have not filed taxes, you may need to submit documents that prove that you have no taxes on file with the IRS. We have outlined here the essential information needed to give you the process without sewing. Background To verify your status as a taxpayer, you need to secure a Non-Filing Confirmation Letter (VNF) from the IRS if you are an independent student or parent of a trusted student. Trusted students do not have to verify their non-file status. Your VNF does not apply if you were required to file taxes, but instead you do not have tax returns on file with the IRS (from the date you applied). Your request You have two VNF protection options: Use the Get Transcript tool at irs.gov: Click Get your tax record and select the blue Get Transcript Online butto...

We look at recent changes made to the Income tax Ordinance, 2001 (by the Finance Act, 2014 (law), effective from July 1, 2014. By law, filing a filer and non-filer opinion to improve tax culture, prevent non-compliance tax and considered concerns the right of citizens to pay taxes, in respect of the high cost of business kunabahlaziyi taxpayers. 'Filer 'as defined in the Ordinance means that the taxpayer whose name appears on the list of taxpayers released by the Federal Board of Revenue from time to time or charge card to taxpayers. 'E-Filer' is a non-file person. The list of taxpayers working and available on the website of the FBR and can be accessed by the following link: www.fbr.gov.pk Home> e-Services> Active taxpayers (income tax) With this book we will get you different tax rates withheld from the withdrawals and return to the accounts, which are set for 'file' and not for files Read More Check FBR filer status How to check NTN number How to b...

ISLAMABAD: The government has come under increasing pressure from influential tax reforms, which it launched nine months ago to increase its tangible contribution from the sector, and announced the initiative as part of a global anti-economic assistance package. the coronavirus epidemic. The government is discussing a proposal to not pay the 20% capital gains tax (CGT) if the deal is sold after keeping it 1,095 days instead of the 2,921-day period, according to Federal Board of Revenue (FBR) sources. Currently, the tax is exempted if the property is held for more than eight years intended to alleviate speculative practices. Opposition groups want the government to reduce the period to just three years. If immovable property is sold before an eight-year period, it is less than 20% of tax revenue. Key players in the financial sector, including some members of the cabinet, have been visiting the FBR headquarters for relief. They had also pressured the ...

1. All importers 2. All vendors (including retailers) and distributors 3. Manufacturers who fall into the cottage industry. Home Sector means the annual manufacturer of any sales tax deductions made during any of the last twelve months ending any tax period does not exceed 10 million rupees or his annual expenditure (electricity, gas and telephone) over the last 12 months ends any period tax period does not exceed eight hundred rupees;} 4. Merchants (Tier-1 Merchants means: 5. A retailer acting as a supplier to a national or international mall; 6. A salesman working in a shopping mall with a boutique, a plaza or a center, without any outlets; 7. The seller whose accumulated electricity accumulated during twelve consecutive months exceeds Rupees six hundred thousand; and 8. The seller-cum-seller, involved in the bulk import and distribution of consumer goods for sale through retailers and general consumer auctions;) 9. A person r...

A person may change his or her registration information to complete Income-tax Return in at least three (3) ways. 1. To change information about Iris, one can change / update information by logging in to Iris. The following information can be updated by the person on the Registration Form 181 (filed for conversion) Income Tax: Mobile number Email Your Address / Residence Business Address Addition of Business Branches Legal Agent / s 87 of the Income-tax Ordinance 2001 Bank Account 2. To change information using the Federal Board of Revenue (FBR) helpline, one can change and update information through the FBR telephone service by telephone or email. The following information can be updated by the helpline: Name Birthday Gender Disability status Senior Citizen Status 3. Changing Information by Visiting the Regional Office (RTO) For changes in registration in respect of the following issues, a person will need to visit their appropr...

Unfortunately, Pakistan has the lowest ratio of income tax payers among many other countries. As only 1% population of Pakistan is a tax payer as recent statistics of Federal Board of Revenue show that only 1.42 million people are paying their taxes. The federal government is trying to increase the tax payer ratio in the annual budget since 2013. In order to convert non-filer to  filer , Finance Act 2014 is introduced to  penalize the non-filers  by compelling them to become tax payers. A Filer is the person who files his/her income tax return annually. As per Section 2(23), a filers is one whose name appears in the Active Tax Payer list (ATL) issue by FBR. Tax law regards the taxation and distribution of Tax Return as two separate activities – a concept that is not generally accepted by most people. Paying or deducting a tax does not remove a person from the official and prescribed tax return filing system, so one cannot be a file unless one person submits thei...