Federal Board of Revenue-Press Releases

(FATE Wing-FBR)

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The federal government has imposed regulatory duty at the rate of 25 per cent on export of waste and scrap of copper and aluminum, says an SRO issued by Federal Board of Revenue (FBR).
According to the SRO-(1)2010, a regulatory duty at the rate of 25 per cent has been imposed ad valorem on export of waste and scrap of copper and aluminum as well as on bars, rods, ingots, slabs, and billets made thereof from 13th March, 2010 to 30th June, 2010 on the basis of ECC’s decision. The position shall be reviewed at the time of budget formulation for financial year 2010-11.
 

Hamid Raza Wattoo
Secretary PR
Ph: 051-920 8407
Fax: 051-920 8407

Under the instructions of Chief Commissioner, Large Taxpayer Unit, Karachi (LTU) Ms. Yasmin Saud, a meeting was held with the representatives of banks, financial institutions and corporate taxpayers on 9th March, 2010 in order to discuss issues arising in connection with the levy of 16% Federal Excise Duty (FED) on services provided by banking and non-banking financial companies. Mr. Nasir Butt, Commissioner (Audit-II), LTU welcomed the participants.

From 1st July, 2009, the rate of FED on banking services has been enhanced from 10% to 16%, and it was converted to VAT mode. Thus, banks and financial institutions were allowed to adjust the FED and Sales Tax paid on their purchases of goods or services against their output tax liabilities. Likewise, registered clients of banks and financial companies also became entitled to adjust the amount of FED paid to banks or financial companies. However, to make such adjustment, registered persons need invoices issued by the banking companies, which is causing some problems. Presently banks are only issuing certificates on the specific request of their corporate clients, and these are not legally tax invoices. To bring this practice in line with the legal requirement, suggestions were taken from the stakeholders.

During the meeting, the representatives were encouraged to express their views and inform about the practical problems related to issuance of invoices. Officers of LTU discussed various options which could facilitate the taxpayers, and noted the proposals given by the participants. On the basis of this feedback, LTU will compile a report and make recommendations to FBR for formulating a uniform procedure for the issuance of invoices by banks and non-banking financial institutions for the facilitation of taxpayers.
 

Hamid Raza Wattoo
Secretary PR
Ph: 051-920 8407
Fax: 051-920 8407

In order to educate and facilitate the Port and Terminal Operators about the recent levy of Federal Excise Duty in VAT mode on their services, an orientation seminar was conducted by the Large Taxpayer Unit, Karachi on Tuesday, 23rd February, 2010.

Organized by the Taxpayer Facilitation Division of LTU, the seminar aimed at providing information and assistance to the port and terminal operators about payment of 16% Federal Excise Duty in VAT mode on services rendered by them at or near any port area. In the Federal Budget 2009-2010, the Government levied FED on services provided by port and terminal operators at the rate of sixteen percent. However, it was found that many such units who were engaged in providing services like piloting and berthing of vessels, loading and unloading of cargo, storage, delivery, etc. at or near the port areas were not aware of the levy of FED on their services.

The seminar was attended by representatives of Karachi Port Trust as well as many prominent terminal operators. Addressing the audience the Chief Commissioner LTU, Mrs. Yasmin Saud emphasized on the need to improve compliance level of the taxpayers through education and awareness.

During the panel discussion, Mr. Ashfaq Tunio, Additional Commissioner answered wide-ranging questions raised by the audience on the scope of FED on services, payment structure and philosophy behind introducing FED in VAT mode. Mr. Mardan Abbasi from Karachi Port Trust provided some support information regarding stevedores and terminal operators.

During presentation, Ms.Farah Farooq, Deputy Commissioner TFD (Taxpayer Facilitation Division) covered the legal provisions and view point of tax authorities on this new levy.

The participants appreciated the initiative by LTU, Karachi which was aimed at better awareness among taxpayers, encouraging voluntary compliance and removing any practical difficulties being faced by them.
 

Hamid Raza Wattoo
Secretary PR
Ph: 051-920 8407
Fax: 051-920 8407

Federal Board of Revenue (FBR) is striving to broaden the tax net and enhance the tax-to-GDP ratio to lessen the country’s dependence on external capital flows to fund the much-needed development projects.

This was stated by Mrs. Riffat Shaheen Qazi, Member FATE, FBR, while speaking to a group of some 30 college students from Talagang, district Chakwal, who visited the Facilitation and Taxpayers Education (FATE) Wing of the FBR for an academic briefing.

Mrs. Qazi welcomed the students and apprised them of the role and importance of FBR in the national economy. She also briefed the students on structure, working, functions and significance of FBR and its line departments like Inland Revenue (Income Tax, Sales Tax, and Federal Excise Duty) and Customs department. The presentation highlighted the reforms process, new image and approach of FBR.

The students were informed about the FBR’s efforts for promoting Taxpayers Facilitation and motivation for voluntary compliance of fiscal laws. They were further briefed on the developments of Inland Revenue Service and integration of tax matters.
 
In the end a session of questions and answers was also conducted. The students and the faculty members felt enlightened about new face of FBR.
 

Federal Board of Revenue (FBR) has vowed to achieve 100 per cent automation of its different organs, including customs, income tax and sales tax etc.

In a statement, the FBR spokesman has maintained that automation of FBR and its key organs like customs, income tax and sales tax, is in good progress and FBR is fully committed to achieving 100 per cent automation of work processes in key wings and departments.

However in some recent media reports it has been wrongly reported that Pakistan Customs Computerised System (PaCCS) is being closed down. These reports have mixed up PaCCS with the M/s. Agility which is a company providing software to run the system for PaCCS. It has been decided following the input received from the system audit of the software and some other related issues that the automation of Customs may not be rolled out through M/s. Agility and FBR will come up with a substitute for PaCCS for providing automated services and rolling it out to all the customs stations in the country.
 

Hamid Raza Wattoo
Secretary PR
Ph: 051-920 8407
Fax: 051-920 8407

Germany has pledged to help Pakistan in successfully implementing the reforms process currently under way in Federal Board of Revenue (FBR).

“Germany considers Pakistan a valued partner in business and trade and it would be happy to provide any technical support to Pakistan in modernising its tax administration,” said Dr. Birger Nerre during a meeting with Ms Riffat Shah Qazi, Member Facilitation & Taxpayers Education FBR. Dr Birger Nerre who heads the Public Finance, Administration Reforms and Anti-Corruption wing of the German Technical Cooperation is leading a four-member delegation on a visit to Pakistan to explore avenues for enhancing mutual cooperation and exchange technical expertise between the two countries.

Ms. Qazi briefed the visiting delegates on the various steps and measures taken by the FATE Wing to broaden tax base, raise tax-to-GDP ratio, and to promote a taxpayer-friendly image of FBR. She also explained the nature of work executed by FATE Wing with regard to organisation of seminars, workshops and promotion of friendly relations with the taxpayers and other stakeholders, including the print and electronic media.

Dr. Birger Nerre appreciated the reforms process being pursued by FBR with a view to modernising the tax machinery and introducing VAT from the next financial year. He said Germany was keen to work with Pakistan in different areas of the economy, including taxation, and their ongoing visit to Pakistan was aimed at working out modalities of a framework that would allow the two countries to forge ahead in their bilateral trade and economic relations. Senior FBR officials, including FATE Chief Sajjad Ahmad Khan, Secretary Dr Akthar Hussain and others also attended the meeting.
 

Hamid Raza Wattoo
Secretary PR
Ph: 051-920 8407
Fax: 051-920 8407

Federal Board of Revenue (FBR) has vowed to broaden the tax base without putting additional burden on the existing taxpayers.

This was stated by Mr. Shahid Anwar Khan, Chief Commissioner Inland Revenue, RTO Rawalpindi, while chairing the 8th meeting of Regional Tax Advisory Committee at the RTO.

The meeting was attended by representatives of Rawalpindi Chamber of Commerce & Industry (RCC&I), Rawalpindi Islamabad Tax Bar Association (RITBA) and a number of Trade Bodies and Associations from Rawalpindi as well as from Mufassil Areas (Jhelum, Chakwal, and Gujar Khan).

Mr. Anwar said the government wanted to take on broad the traders and business community before launching an exercise for broadening of tax base. The exercise to bring more people in the tax net would be facilitated by the FBR through distribution of a simple form amongst the traders of new commercial areas which have emerged during the last few years.

The form will require individuals to provide information about the name and nature of business, name of proprietor, CNIC number along with a copy, NTN (if existing taxpayer), along with proof of filing of return for tax year 2009. No further information will be obtained from these taxpayers.

The traders and businessmen attending the meeting appreciated the efforts of the Inland Revenue Department with regard to identification of new taxpayers in specified areas of Rawalpindi and Mufassil and to bring them into tax net, so that the tax burden was distributed amongst the existing taxpayers and the new ones. They also offered valuable suggestions to make this exercise successful.

Hamid Raza Wattoo
Secretary PR
Ph: 051-920 8407
Fax: 051-920 8407

Afghanistan has shown keen interest in the reforms process under way in Federal Board of Revenue (FBR) with a view to using the reforms as a model to revamp its own taxation system.
The interest was shown by Dr Ahmad Shah Zamanzai, Director General of Afghanistan Revenue Department, who led a delegation of senior Afghan tax officials during a visit to the Regional Tax Office (RTO) Lahore.

The visiting delegates said the Pakistani experience of tax reforms was interesting enough for them to look at it and see how it could be helpful in undertaking similar reforms in their country.
During the visit, Khawaja Shaukat Ali, Chief Commissioner Inland Revenue Regional Tax Office Lahore, briefed the delegation about the reform process and the milestones achieved in this regard. He also explained the working of Regional Tax Office on functional basis with reference to Audit, Enforcement with support functions of Legal, Tax Facilitation & Information processing. The steps taken by the Federal Board of Revenue and Regional Tax Office to facilitate the taxpayer through setting-up of facilitation desk, online facilities available, and establishment of kiosks in commercial areas were also explained. The delegates showed keen interest in the achievements of Regional Tax Office, Lahore, asking pertinent questions about the Pakistani tax experience and how it could be replicated in Afghanistan.

Later on the delegation visited various floors of Tax House and viewed ongoing work. The delegation also visited data entry centre (DEC), record room and saw demonstration by the officer in this regard. The delegates appreciated the facilities of e-filing, NTN, STRN, Refund Receipt Counters and Reception Counters available for the taxpayers and visitors.
 

Hamid Raza Wattoo
Secretary PR
Ph: 051-920 8407
Fax: 051-920 8407

Ms. Riffat Shaheen Qazi, a BS-21 officer, has assumed charge of the office of Member Facilitation and Taxpayer Education (FATE) in the FBR Headquarters.

Ms. Qazi, a senior officer of Income Tax Group from the 7th Common, has already served in various key positions serving across the country in her illustrious career spanning over 31 years. Her last posting was in the Regional Tax Office Rawalpindi where she led a series of tax recovery drives as the Chief Commissioner Inland Revenue Service.

Ms. Qazi brings with her a rich professional and academic experience. She holds a Master’s degree and an MPhil in Economics from the University of Peshawar. Later she completed Masters in Business Administration from John F. Kennedy University USA. Her last academic pursuit was at the prestigious Harvard University, where she attended an extensive Senior Executive Management training course.

Hamid Raza Wattoo
Secretary PR
Ph: 051-920 8407
Fax: 051-920 8407

Federal Board of Revenue (FBR) Chairman Mr. Sohail Ahmad has called for concerted efforts to improve the collection of revenue.

“Meeting the revenue collection target is a huge responsibility and we must pool and use all our resources to meet this challenge,” he said in his address to a seminar organised by the HRM Wing of the FBR on ‘IP framework for effective business processes’ here in the capital.

The Chairman emphasized the importance of IP and its contribution towards the performance of various FBR wings such as audit and enforcement. He announced similar seminars would be held in the coming days to gather feedback and break the disconnect between the Headquarters and the Field Formations.

The seminar attended by the concerned FBR Members, all Chief Commissioners from the Field Formations as well as Commissioners IP, DG (IMS), CEO (PRAL) and GM (PRAL) discussed a broad range of issues related with IP to identify a clear roadmap for better cross verification of information and broadening of tax base in the wake of functional and structural integration of domestic taxes within the FBR.

CEO PRAL, DG (IMS) and Member Sales Tax and Federal Excise also briefed the participants about the ongoing activities in the field and the actions required to be performed. The participants proposed removal of dormant NTNs, integration of all applications of Sales Tax and Income Tax, more training in Mahasil, STARR & their different modules as well as specific software
relevant to job descriptions.

At the end, the DG (HRM) thanked the participants for their valuable input and suggestions and assured that these suggestions would be sent to the concerned authorities for devising the future strategy.

 

Hamid Raza Wattoo
Secretary PR
Ph: 051-920 8407
Fax: 051-920 8407

Federal Board of Revenue (FBR) Saturday denied the government was considering increasing Withholding Tax on electricity bills of commercial consumers by 100 per cent as reported in a section of the press.

A spokesman of the FBR has clarified that the government after looking at the revenue collection performance of Federal Board of Revenue during the second quarter (Oct-Dec 2009) has decided not to take any additional taxation measure.

Hamid Raza Wattoo
Secretary PR
Ph: 051-920 8407
Fax: 051-920 8407

Federal Board of Revenue (FBR) Wednesday said the status of cases involving Sales Tax evasion that are pending for adjudication, had not been affected by the omission of section 45 of the Sales Tax Act, 1990, following the promulgation of Finance (Amendment) Ordinance, 2009, as claimed in the reports appearing in a section of the press in recent days.

In an official statement, the FBR spokesman has dispelled the wrong impression regarding the matters pertaining to section 45 of the Sales Tax Act, 1990, to the effect that section 45 provides no legal sanction for the process of adjudication. This section which is neither charging nor adjudicating in scope, only prescribes pecuniary limits for adjudication by various authorities. Orders of adjudication/assessment are not made under section 45 but under section 11 or section 36 of the Sales Tax Act, 1990.

The spokesman recalled that the Finance (Amendment) Ordinance, 2009, in an attempt to harmonize the domestic tax laws, abolished the separate tier of adjudicating authorities. Through insertion of sub-section 4(A) in section 25, the officer conducting audit, has been authorized to determine the tax liability by passing an order under section 11 or 36 of the Sales Tax Act, 1990.

Press reports had pointed out about pending adjudication proceedings, which had not been saved whereas the fact is that saving of pending adjudication proceedings was not required in view of section 6 of the General Clauses Act, 1897. Section 6 relates to consequences of repeal of Central Acts or Regulations and is equally applicable to amendments in Acts and Regulations.


Similarly, the process of adjudication by a separate authority was consciously discontinued for future cases. At present, final orders determining the tax liability in cases of registered persons are to be made by the same authority in harmony with the procedure under the Income Tax Ordinance, 2001. In the pending cases, adjudication will be continued and finalized under the un-amended provisions.

Moreover, reference to Additional Collector, Deputy Collector or Assistant Collector in the omitted Section 45 would mean reference to Additional Commissioner, Deputy Commissioner and Assistant Commissioner Inland Revenue, etc, as given in Section 72A of the Sales Tax Act, 1990, inserted through Finance (Amendment) Ordinance, 2009.

The spokesman further maintained that issuance of fresh show cause notices is not required and pending proceedings can be continued and finalized. Even otherwise, fresh show cause notices, if required, can be issued within the periphery of limitation of five years prescribed under section 11 and five and three years respectively under sub-section (1) and (2) of section 36. In case, where there is time limit for adjudication, the same can be extended by FBR as provided under section 74 of the Sales Act, 1990.
 

Hamid Raza Wattoo
Secretary PR
Ph: 051-920 8407
Fax: 051-920 8407