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Federal Board of Revenue (FBR) has extended the last date for filing of income tax returns up to October 31 to facilitate the taxpayers.

The one-month extension has been granted following representations received by the FBR from various chambers of commerce & industry, tax bar associations, trade bodies, advocates/income tax practitioners and taxpayers seeking extension of time for filing their IT returns due to constraints faced because of the holy month of Ramazan, Aitkaf, performance of Umrah and the temporary disruption suffered by the e-filing process. The extension would help individuals, associations of persons and the corporate sector to file their returns with convenience and ease.

Meanwhile, the FBR has also extended the due date up to October 31, 2008 for availing of ‘Tax Arrears Settlement Scheme 2008’ (TASIS) introduced earlier vide Circular No.4 of 2008. Under the scheme, individuals, associations of persons and companies against whom tax arrears including additional tax and penalties are outstanding, can settle their outstanding amount of income tax on payment of principal amount only. No additional tax, penalty or fine would be levied in cases where returns are filed in the extended periods.

In another decision, the FBR has also extended up to October 10, 2008 the due date for submission of sales tax and federal excise return and special return for production and supplies, for the tax period August, 2008, and annual sales tax return for the period 2007-08. The board, however, made it clear the payment of taxes for August 2008 had to be made by September 20 as already announced and no further extension would be given to those yet to deposit their taxes.

 

-Sd-
(Hamid Raza Wattoo)
Secretary PR
051-9208407/0346-5023333

Keeping in view the shut down of FBR’s e-portal for six days due to bomb blast in Marriott Hotel and because of approaching Eid holidays, the Federal Board of Revenue is pleased to extend the due date for submission of Sales Tax and Federal Excise Return (STR-7) and Special Return for Production and Supplies, for the tax period August, 2008, and Annual Sales Tax Return for the period 2007-08, up to 10th October, 2008.

The last date for payment of due taxes for August 2008 shall remain unchanged at 20th September, 2008, as already extended vide Sales Tax Circular no. 09/2008 dated 15.09.2008.
 

(Abdul Hameed Memon)
Secretary (ST&FE-L&P)
 

Federal Board of Revenue (FBR) has set up 10 tax facilitation centres in the capital to facilitate taxpayers seeking to file their income tax returns.

The facilitation centres have been set up by Regional Tax Office Islamabad in line with the FBR’s revenue strategy of reforms with special focus on taxpayer facilitation. The centres are spread over the entire capital territory and are situated within the vicinity of business and commercial centres in ten major sectors which include F-6 near Shaheen Homeo, F-7 near Book Fair Jinnah Super, F-8 near Dainty’s Restaurant, F-10 near Saeed Jewellers Main Double Road, G-6 near National Bank, Melody Market, G-8 Markaz near Mundail Plaza, G-9 Markaz near Bus Stand, G-10 near Saon and Bella Road Junction, I-9/3 Regional Tax Office Plot 210, Street 6, and Blue Area near Rajgan Enterprises. Senior IT officials have also been deputed for supplying and receiving IT returns and other similar statements. In case of any inconvenience and facilitation, Yasmin Yousuf, deputy commissioner Income Tax RTO Islamabad, can also be contacted at 051-9257164.

Federal Board of Revenue (FBR) has exempted the Asian Development Bank (ADB) from payment of all taxes, including payment and collection of withholding taxes, says an official statement issued here Saturday.

It says the exemption was already being enjoyed by the ADB under a proviso to section 54 of the Income Tax Ordinance, 2001. However, the proviso was withdrawn following an amendment made through Finance Act, 2008, leaving no cushion or protection to the ADB income from levy of taxes w.e.f. tax year, 2009 and onwards.

The ADP however took up the matter with the Ministry of Finance, requesting for continuation of exemption to the bank as allowed earlier on under Article 56 of the Asian Development Bank Ordinance, 1971, which deals with the implementation of international agreements for establishment and operation of the bank and protects the bank's income from levy of all taxes, including payment and collection of withholding taxes.

The FBR, therefore, has again allowed the exemption to the ADB by amending the Second Schedule to the Income Tax Ordinance, 2001 and adding new clauses vide SRO No. 1012(I)/2008 dated 23.09.2008 whereby the ADB's income has been exempted from all taxes as "under the Asian Development Bank Ordinance, 1971 (IX of 1971)".

-Sd-
(Hamid Raza Wattoo)
Secretary (PR)

Federal Board of Revenue (FBR) has further extended the due date for the submission of sales tax and federal excise return and special sales tax return for production and supplies for the tax period August 2008, up to September 30.

The decision to extend the due date which was previously set for September 25, has been taken due to the technical disruption the FBR's web portal suffered following the Marriott hotel blast. The bomb explosion at the hostel left the board's web portal inoperative for six days, leading to problems for the already registered persons to e-file their sales tax and federal excise returns for the tax period August, 2008.

The board, however, made it clear the payment of taxes for August 2008 had to be made by September 20 as already announced and no further extension would be given to those yet to deposit their taxes. Similarly, the board would not change September 30 being the last date for the submission of annual sales tax return by the corporate sector.

-Sd-
(Hamid Raza Wattoo)
Secretary (PR)

Federal Board of Revenue (FBR) has modified the Income Tax rules to judge taxability and seek more information about the salaried taxpayers.

Under the SRO No. 997(1)/2008 issued by the board, the annual statement of deduction of income tax from salary to be submitted by the employer as specified under Part IX, of the Second Schedule to the income Tax Rules, 2002 has been substituted.

As per new format more information regarding the employee is sought for record of the Tax department in view of the fact that wherever employer's annual statement is filed, employees having no other source of income are not required to file their return of income. The new format also caters to the change in law regarding taxability of salary income for the facility of the employers.

In another SRO No. 998(1)/2008 issued by the FBR, monthly statement of deduction of income tax at source to be filed by the withholding agents in accordance with provisions of section 165(2) as specified in Part X of the Second Schedule to the Income Tax Rules, 2002 has been substituted.

As per new format specified information regarding the nature of payments and taxability of the translations is sought in accordance with change in law and for better monitoring/ analysis of taxes withheld. The changes in the IT rules have been made with a view to facilitating the taxpayers regarding verification/credit of tax withheld.
 

-Sd-
(Hamid Raza Wattoo)
Secretary (PR)

Federal Board of Revenue (FBR) has set up nine tax facilitation centres in the capital to facilitate taxpayers seeking to file their income tax returns before the September 30 deadline.

The facilitation centres have been set up by Regional Tax Office Islamabad in line with the FBR's revenue strategy of reforms with special focus on taxpayer facilitation. The centres are spread over the entire capital territory and are situated within the vicinity of business and commercial centres in nine major sectors which include F-6, F-7, F-8, F-10, G-6, G-8, G-9, G-10 and Blue Area. Senior IT officials have also been deputed for supplying and receiving IT returns and other similar statements.

-Sd-
(Hamid Raza Wattoo)
Secretary (PR)

Federal Board of Revenue (FBR) has clarified a news item published in a section of the press, regarding calculation of duty drawback rates.

In an official statement, the board terms as misleading the news item which says: "The exchange rate of dollar against the rupee has not very much impact for payment of duty drawback on the basis of FOB value. Contrary to this, exporters have to suffer losses for claiming rebate and duty drawback on the basis of export goods quantity calculated in kilograms. The working of duty drawback in kgs on the old exchange rate has negative implications for the export sectors."

The Federal Board of Revenue clarifies that in most of items the duty drawback is allowed on the basis of FOB value whereas the number of items on which duty drawback is allowed on the basis of specific rate is quite small. Therefore, impact of parity rates is insignificant on items where FOB value is the criteria.

For revision of duty drawback rates the criteria is laid down in the Customs Rules. According to relevant rules, such revision should be completed by the 30th January for preceding year, the exercise for revision of the rates is in hand by IOCO and the revised rates would be finalised by the due date.

-Sd-
(Hamid Raza Wattoo)
Secretary (PR)

The Federal Board of Revenue (FBR) has extended the date for payment of sales tax and federal excise duty, including special excise duty, for the tax period August 2008, up to September 20, 2008.
The board has further extended the due date for submission of sales tax and federal excise return for the said tax period up to September 25, 2008. The extension has been granted keeping in view the recent introduction of mandatory electronic filing of sales tax and federal excise returns and to facilitate taxpayers to familiarise themselves with the new system.

-Sd-
(Hamid Raza Wattoo)
Secretary (PR)

The Federal Government has issued a notification SRO 946(I)/2008 dated 04.09.2008 whereby regulatory duty equivalent to the Price Differential Claims (PDC), in Rupees per litre, of High Speed Diesel (HSD) and Superior Kerosene Oil (SKO) as notified by the Ministry of Petroleum & Natural Resources, plus 1% of prevalent consumer price to cover for foreign exchange loss, shall be levied on export of HSD and SKO to Afghanistan as per rates given in the following Table:-

2.   The rates given the table shall remain inforce till an amendment is made by the Ministry of Petroleum and Natural resources on the basis of their calculations.

3.The exports of HSD & SKO made to Afghanistan shall be contingent upon strict adherence to the procedure, terms and conditions laid down in the Export Policy Order.

-Sd-
(Khalid Mahmood)
Secretary (Export Policy)

 Tax Bar Associations and taxpayers have requested for extension in last date for filing of annual withholding tax statement due on 31st August, 2008 on account of their pre-occupation with e-filing of sales tax returns.

The request has been considered by the Federal Board of Revenue and it has been decided to facilitate the taxpayers. Accordingly, the last date for filing of annual withholding tax statements is extended up to 5th September, 2008, with no penal action.

All withholding tax agents are requested to ensure filing of their annual withholding tax statements by the extended date i.e. 5th September, 2008.

-Sd-
(Muhammad Hafeez Mughal)
Secretary (PR)

FBR has surpassed the revenue target of Rs 134.8 billion, fixed for July -August 2008-09. The provisional tax collection indicates a cumulative growth of 25.7%. The net collection during the period has been Rs 139.7 billion as against Rs 111.1 billion during the same period of last year. The revenue on account of direct taxes has shown a healthy increase of 29.1% by collecting Rs 37.6 billion against Rs 29.1 billion. The sales tax collection has reached to Rs. 65.4 billion against Rs 55.1 billion, indicating a growth of 18.8%. The tax receipts on account of federal excise have registered a growth of 74.4%, during the period under review. The collection has reached to Rs 14.7 billion as against Rs 8.4 billion in the corresponding period of last year. Finally revenue from Customs duties has increased by 19.0% over the corresponding period of last year. The net collection has been Rs. 22 billion against Rs 18.5 billion last year.

Provisional collection during the month of August 2008 indicates that an amount of Rs 66.9 billion has been collected. Of the total taxes, direct taxes has collected Rs 18.9 billion, sales tax Rs 31.9 billion, federal excise Rs 6.5 billion and Customs duty Rs 9.6 billion.

It may be added that the figures are provisional and likely to increase further at the time of finalization.
 

-Sd-
(Muhammad Hafeez Mughal)
Secretary (PR)

 Federal Board of Revenue has further extended the date for online submission of Sales Tax and Federal Excise Return for the tax period July, 2008 up to 5th September, 2008, by issuing Sales Tax Circular No. 07/2008 dated 30th August 2008. However, the last date for payment of due taxes shall remain unchanged at 20th August, 2008 as extended vide Sales Tax Circular no. 05/2008 dated 16.08.2008.

It is also clarified that no further extension for the aforesaid tax period shall be allowed. Therefore, the taxpayers are requested to avail this last extension and file the returns by the 5th September, 2008.
 

-Sd-
(Muhammad Hafeez Mughal)
Secretary (PR)

Federal Board of Revenue has issued a Notification (Income Tax) / SRO 895 (1)/2008, on 27th August, 2008. Following are its explanatory notes:

This SRO is being issued in consequent to the introduction of a new provision in the Income Tax Ordinance, 2001 through Finance Act, 2008 which has given powers to the Commissioner to require any person to install and use an electronic tax register of such type and description as may be prescribed for the purpose of storing and accessing information regarding any transaction that has a bearing on the tax liability of such person. This provision of law is an importance step towards the documentation our economy and now the sale transactions of big retailers and whole sellers may be audited for the taxation of their income. This provision will not only help to assess the real tax liability of a person but will also reduce the discretion of the department which may be used for assessing such sale transactions by bald estimation.

For the above purpose operational legal provisions were also required which have been incorporated in the income Tax Rules, 2002 through the above SRO prescribing the modus operandi of installation, use, identification number, maintenance, and inspection by the tax authority of the Electronic Tax Register (ETR).
 

-Sd-
(Muhammad Hafeez Mughal)
Secretary (PR)

Federal Government has exempted 5% customs duty on import of mineral oil by persons registered with Plant Protection Department as importer, formulator or manufacturer of pesticides, if imported by October, 2008, by issuing Notification (Customs) / SRO 892(I)/2008 dated 27th August, 2008 amending SRO 567(I)/2006 dated 05-06-2006 for its use as an adjuvant for the effective control of attack of Mealy Bug on cotton crop.

-Sd-
(Muhammad Hafeez Mughal)
Secretary (PR)

Federal Board of Revenue has issued two Notifications (Sales Tax) / SROs 894 & 897 (1)/2008, first on 25th and second on 27th August, 2008, respectively.

Explanatory notes for SRO 894 (1)/2008 dated 25th August, 2008, are as under:

Acrylic polymer in primary form was zero-rated vide SRO 509(I)/2007 dated 09.06.2007. However, its PCT heading was mentioned as 3906.9080 instead of 3906.9090. The mistake was rectified vide SRO 538(I)/2008 dated 11.06.2008. Now this correction has been given retrospective effect vide SRO 894(I)/2008 dated 25.08.2008 for the benefit of general public.

Explanatory notes for SRO 897(I)/2008 dated 27th August, 2008, are as follows:

In order to reduce input cost of agriculture products, the ECC recommended removal of customs, sales tax and income tax on mineral oil in its meeting dated 15.07.2008. Accordingly, sales tax exemption has been granted to importers of mineral oil not exceeding 250 tons for manufacture of pesticides subject to a certification by Plant Protection Department.

-Sd-
(Muhammad Hafeez Mughal)
Secretary (PR)

Response of business community to FBR’s landmark decision of mandatory electronic filing of Sales Tax Returns has been excellent. The measure aims at requiring the registered persons to file their declarations electronically at FBR’s website, without going through the hassle of making long queues in front of banks for paying sales tax and submitting the returns. For creating awareness about the smooth implementation of the e-filing, FBR conducted seminars in all the major cities, in coordination with representative trade bodies. Alive to the fact that initial phase of such a remarkable step towards automation would entail problems of comprehension and awareness, FBR adopted a proactive approach at the highest level for redressal of problems and removal of difficulties. For this purpose, Member (Sales Tax & FE) Mr. Abdul Wadood Khan visited the offices of FPCCI Karachi, LCCI, Faisalabad Textile Export Association, tax bodies and different RTOs at Lahore last week to ascertain from the taxpayers the problems being faced by them with a view to taking corrective action. The salient features of the scheme were explained and the leaders of the business community were asked to provide list of registered persons facing hardship in e-filing so that difficulties, if any, are removed forthwith.

The business community and the e-Intermediaries have shown an overwhelming response and so far 44,309 taxpayers have obtained e-Enrollment at FBR Portal and 32,296 taxpayers have filed their Sales Tax Returns electronically from their offices/ homes using internet. All remaining taxpayers are either in the process of e-enrollment or preparation of electronic returns.

For providing telephonic help in using the system a contact centre, which operates round the clock (24 Hrs), is also established at (051) 111-772-772. The taxpayers are also provided assistance through e-Mails which are received at eSupport@pral.com.pk. For those taxpayers who have difficulty in working on the eFBR Portal due to internet or power problem, FBR has established self service Kiosks and operator assisted help desks in the Regional Tax Offices. In addition to the arrangements described above, a data centre with high speed bandwidth of internet has been established with an adequate setup of computer equipment to handle the e-filing. The high speed band width arranged by is expanded automatically on need basis; where as the maximum bandwidth utilized by the taxpayers during this month is 40 Mbps.

Keeping in view the learning curve of taxpayers and large scale change management from paper based filing of returns to e-Filing, FBR has extended the last date of e-Filing of sales Tax returns to 31st August 2008.
 

(Muhammad Hafeez Mughal)
Secretary (PR)

The Federal Board of Revenue has extended the date for online submission of Sales Tax and Federal Excise Return for the tax period July, 2008 up to 31st August, 2008, by issuing Sales Tax Circular no. 06/2008 dated 25th August 2008. However, the last date for payment of due taxes shall remain unchanged at 20th August, 2008 as extended vide Sales Tax Circular no. 05/2008 dated 16.08.2008.

-Sd-
(Abdul Hameed Memon)
Secretary (ST&FE-L&P)

-Sd-
(Muhammad Hafeez Mughal)
Secretary (PR)

-Sd-
(Muhammad Hafeez Mughal)
Secretary (PR)

-Sd-
(Muhammad Hafeez Mughal)
Secretary (PR)

-Sd-
(Muhammad Hafeez Mughal)
Secretary (PR)

-Sd-
(Muhammad Hafeez Mughal)
Secretary (PR)

-Sd-
(Muhammad Hafeez Mughal)
Secretary (PR)

The Board has extended the due date for the payment of Sales Tax and Federal Excise Duty for the tax period July, 2008 upto 20th August, 2008 in order to facilitate taxpayers who faced difficulties in e-filling their Sales Tax and Federal Excise Returns.
 

(AFTAB AHMAD BHATTI)
Second Secretary (STM)

FBR CHAIRMAN EMPHAISES CLEARANCE OF PENDING REFUND CASES ON PRIORITY BASIS
 

-Sd-
(Muhammad Hafeez Mughal)
Secretary (PR)

-Sd-
(Muhammad Hafeez Mughal)
Secretary (PR)

-Sd-

(Muhammad Hafeez Mughal)

Secretary (PR)

It has been made mandatory for all Sales Tax and Federal Excise registered persons to file all their returns electronically. A series of workshops/ seminars were planned to educate the taxpayers and consultants about the process of e-filing and these were also advertised in newspapers. The schedule of one such workshop, which was earlier planned to be held on Tuesday, 12th August, 2008, at Karachi Chamber of Commerce and Industry, has been changed. This workshop shall now be held on Monday, 11th August 2008, at 3.00 pm at Karachi Chamber of Commerce and Industry. All taxpayers/ consultants are requested to attend.
 

-Sd-
(Mujeeb-ur-Rehman Talpur)
Second Secretary (PR)

-Sd-

(Muhammad Irshad)

Chief (FATE) FBR.
 

 Sd-
(Khawar Khurshid Butt)
Member FATE / Official Spokesman, FBR

 Sd-
(Khawar Khurshid Butt)
Member FATE / Official Spokesman, FBR

-Sd-
(Muhammad Hafeez Mughal)
Secretary (PR)

Chairman, Federal Board of Revenue and Secretary, Revenue Division, Mr. Ahmed Waqar called upon the tax machinery to gear up its efforts to improve tax-to-GDP ratio which at present was not upto the reasonable level and low even in the region.

He was addressing the senior officers of the Board at the FBR Headquarters here today.

In this regard, the Chairman directed the technical wings of FBR to study and identify the grey areas which need to be tackled effectively. "We have to improve our tax-to-GDP ratio and broaden the tax base to enable FBR to play its due role in economic development of the country", he added.

On public perception of FBR and its field offices, the Chairman stated that every possible step including improvement in the existing automated systems will be taken to root out corruption. "No compromise will be made on this issue. We have to improve our image in public," he categorically told the officials. Mr. Ahmed Waqar said that he was in favour of enforcement of tax laws but without harassment of the taxpayers.

Underlining the improvement in Board's performance, the Chairman emphasised the need to adhere to strict discipline among the FBR workforce to considerably enhance its performance and improve the image of the department amongst the stakeholders.

Chairman said that although revenue collection target of Rs. 1250 billion for current fiscal year was challenging but it will, Inshallah, be achieved with the team spirit. He told the officials that he was a pro-reforms person and played his due role in this regard wherever he served. He said that he was a strong believer of change as he believes that status-quo was not good for any institution and reforms were necessary for betterment.

Earlier, Member (FATE) & Official Spokesman of FBR, Mr. Khawar Khurshid Butt, welcomed Mr. Ahmed Waqar, on behalf of the officers of FBR & on his own behalf, on assuming the office of the Chairman and assured him all cooperation in discharging of his official duties. He also lauded the services of the out-going Chairman, Mr. M. Abdullah Yusuf during his four and a half year stay and especially for initiating the difficult task of tax administration reforms. He expressed the hope that under the able guidance of the new Chairman, FBR reforms will be completed successfully within the stipulated time.

Member (DT), Member (Customs) & Member (ST) also briefly explained to the new Chairman about their respective Wings. It was decided that detailed representations will be made by each Member separately in the next two days.
 

-Sd-
(Muhammad Hafeez Mughal)
Secretary (PR)

Pakistan source income of International Finance Corporation (IFC) was exempt from tax in accordance with the provisions of proviso to section 54 of the Income Tax Ordinance, 2001. The said proviso was omitted wide the Finance Act, 2008. IFC, accordingly approached the Federal Government and claimed that in view of the agreement of 1955 and the IFC Act, 1956, the Pakistan source income of IFC is exempt from tax. The claim has been considered and found correct, accordingly, Part I of the Second Schedule to the Income Tax Ordinance, 2001 has been amended and a new sub-clause (xxi) in clause (66) has been inserted therein which exempts, any Pakistan source income of the IFC. Like-wise, a new clause i.e. (67) has been inserted in Part IV of the Second Schedule to the Ordinance which provides that IFC would not be required to withhold tax while making any payment under the different sections of the Ordinance.
 

-Sd-
(Muhammad Hafeez Mughal)
Secretary (PR)

Secretary General, Revenue Division & Chairman, Federal Board of Revenue, Mr. M. Abdullah Yusuf has called for efficient use of modern technology for more revenue generation, enhancing tax-to-GDP ratio and expanding the tax base.

He was addressing the Workshop on Management Automation Projects held at the FBR Headquarters today. Among others, officers dealing with the automation work at field offices of FBR attended the Workshop.

Chairman stressed upon the officers to equip themselves with latest techniques and technologies. "This organisation has great potential. Once you are fully equipped with modern knowledge, techniques and technology, then it would not be difficult to achieve the desired results", he added. He was of the opinion that as an institution or country, we have to go for a better change. No country or organisation can grow and progress if it remains stagnant. We have to change ourselves with this rapid changing world to face the challenges of modern times, he opined.

Chairman said that although we were happy to cross the psychological barrier of Rs. One trillion in revenue collection in last fiscal year (2007-08) but, according to his judgement, still there was a gap of Rs. 400 bn to Rs. 500 billion exists today. This gap cannot be bridged until and unless we enhance our tax-to-GDP ratio from existing 11% to 15 / 16%. Its not impossible provided we have the will, commitment and tools to do it, Mr. Abdullah Yusuf observed. He, however, said that despite all constraints, handicaps and non-availability of necessary tools we have been able to expand our tax base in last four years form one million to 2.2 million taxpayers at the growth rate of 20% per annum.

Similarly, we have been able to enhance the revenue collection at an average of about 18% per annum. "This is good & fine but, we have to plug the existing gap". In next seven years, we have to achieve the target of 15 /16% tax-to-GDP ratio with an annual growth of atleast 0.5 %, the Secretary General added.

Commenting on the on-going automation projects, Mr. Abdullah Yusuf said that we have to realise the dream of making FBR a totally paperless organisation.

He asked the relevant officers and officials to make all possible efforts to achieve this goal.

On the occasion, the Chairman reminded FBR employees of their responsibilities towards making FBR a most progressive and efficient organisation. He added that the special treatment being given to FBR employees, in perks and privileges, by the Government was not for all times to come " We have to prove through our actions and achievements that we fully deserve for this treatment," he remarked.

Earlier, in his welcome address, Director (Projects), FBR, Mr. Muhammad Asghar Chaudhry informed that currently four pilot automation projects were in the process of development and implementation. They are; "Human Resource Management Solution (HRMS)" "Electronic Correspondence Management System (e-Dox),' "Budget & Accounts/Inventory Management System- SAP" and "e-Archiving." All these projects are at different stages of implementation at FBR Headquarters. After their completion, they will be replicated in the field offices of the Board, Mr. Chaudhry added. He said that these systems will bring transparency and efficiency in the overall administration and management system of the Board.

-Sd-
(Muhammad Hafeez Mughal)
Secretary (PR)