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KARACHI: The Finance Bill 2020 has proposed changes to taxability on payments made for goods, services and contracts. According to explanation to amendments made to Section 153 of Income Tax Ordinance, 2001 through Finance Bill 2020 by BDO Pakistan Audit Consultancy and Tax Advisory Firm: (1a): The bill seeks to include toll manufacturing to be treated as sale of good for the purpose of withholding under this subsection. This inclusion clarifies the taxability of this segment and it will be minimum tax. (3): The bill seeks to treat taxes withheld at source as minimum tax on payment of goods, services and execution of contracts. (4): The tax deducted at source is adjustable for the Company being manufacturer and the Public Listed Company registered on stock exchange. This inclusion will result in expansion of tax collection by the board. The Bill seeks that the Commissioner shall respond to application for the issuance of exemption certificate related to withholding of taxes ...

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...

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,...

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

Pakistan has one of the lowest rates of tax-on GDP in the world. For the uninitiated, the tax-to-GDP ratio is used to assess country development year after year. They claim that the higher the Gross Domestic Product (GDP) of a country, the higher the amount of tax revenues the government can get by the same as the number of goods and services exported has increased. With those exciting numbers and information out of the way, that's why employed / paid people should care about filling their income tax now more than ever. You should have heard about bank transactions being very drawn to non-filers. As it happens, even the actual interbank transfers are charged a new excise tax (WHT) under Section 236P of the Income tax Ordinance 2001 to non-filers. All bank operations will be taxed at 0.3% WHT unless they file their income tax returns by November 30th 2016. You are also charged more when you buy cars or other property. And if your WHT amount is greater than your applicable taxes, ...

·          Low rates of tax deduction at source by banks on all profits and withdrawals ·       Withholding tax deduction (tax deducted from your income and benefits) when you register and transfer vehicles ·          Lower tax rate on buying and selling goods ·          Low withholding tax rate on profits from security transactions ·          The tax expense on the dividend will decrease ·          Low rate of tax avoidance on tax bond winnings ·          It allows you to recover the overpayment tax deductible For more information, please v isit website . Recommended blogs for you: How to become filer How to check FBR Filer Status How to Check NTN number Cost of being Non-filer

Right to Appeal : Many complaints arise as a result of disagreements between taxpayers and taxpayers (the Inland Treasury) regarding the deduction of income and taxes owed and the overpayment of taxes, penalties, etc. To resolve such disputes, the law sets out a procedure, which gives taxpayers the right to file a complaint before the Commissioner (cases) and if they are not satisfied, another right to file a complaint before the state Court of Appeals and Supreme Court. Persons Eligible to Appeal : Any person who is not satisfied with any order passed by the Commissioner / Officer Inland Revenue has the right to appeal. If man, man himself; in the case of a Personal Organization (AOP), any partner or member of the organization; and in the case of a company the chief executive officer. In the case of the deceased, represent the deceased legally; and in the case of a legally disabled person or a non-abusive person, his or her “representative”. ...