Tax Today

07/06/2019

PTBA has advised FBR to revisit law related to arrest and prosecution under Sales Tax Act, 1990.

In its tax proposals for budget 2019/2020, the apex tax bar said that under the existing law, every director and officer of the Company is liable to be arrested if the officer has reasons to believe that such director or officer is personally responsible for actions of the Company contributing tax fraud.

Accordingly, a person who is a nominee director or employee director can be held responsible for the liability of the company.

The PTBA said that as per interpretation of the law nominee or employee directors be who are not involved in the administrative matters of a taxpayer are being held responsible for the liability of the taxpayer.

“It is a trite law that before any coercive action is taken against any person; it is the duty of the Revenue Officer to provide proper opportunity of being heard and pass a judicious order to establish that the act of the registered person is willful and there was an element of mens rea.”

In the Income Tax Ordinance, 2001 such matters are covered under Section 139 thereof which comprehensively deals with the liability both in case of company and AOP. “Section 139 needs to be replicated in the Sales Tax Act, 1990 on the similar lines.”

The PTBA said that the proposed amendment would protect interest of the nominee/employee directors.

Pointing out the issue of recovery of arrears under sales tax law, the PTBA said under Section 48 which deals with recovery of arrears does not provide any time limit to initiate the recovery proceedings.

“By virtue of section 45B of the Act, a registered person aggrieved by any decision, may file an appeal within thirty days of the date of receipt of the order. On the contrary, under Rule 71 of the Sales Tax Rules, proceeding of recovery of impugned tax may be initiated after thirty days from the date of order.”

In addition, recovery proceedings may be initiated as soon as CIR (Appeals) confirmed the Order under Section 45B of the Sales Tax Act or Section 33 of the Federal Excise Act.

The PTBA said that the section 45B, 48 and the rule are not harmonized. Sometimes order is served to the registered person after many days of the date of order and the recovery proceedings may be initiated under the Rule even if the time limit provided for filing of the appeal has not lapsed.

Therefore, it is recommended that Rule 71 should be amended to provide commencement of recovery proceedings after thirty days from the date of receipt of the order.

Similarly, time limit of 30 days from the date of receipt of the order should be provided in section 48 to bring harmony between the Act and Rules.

The PTBA suggested that thirty days shall also be allowed for initiation of recovery proceedings in case demand is confirmed by the Commissioner Inland Revenue (Appeals) while disposing appeals filed under section 45B of STA and 33 of FEA.

Giving rationale to the proposal, the PTBA said that it would keep harmony between the Act and the Rules in the spirit of natural justice.

07/06/2019

10/10/2018

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📍Those who have not installed previous version of Iris-ADX, please download and install to file Income tax return 2018 in an offline mode.
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*MEMBER-IT*

18/07/2018

Online Income Tax Return for tax year 2018 is available with Iris system of FBR.

28/04/2018

TAX AMENDMENTS VIDE FINANCE
BILL 2018 - HIGHLIGHTS

SALES TAX & FEDERAL EXCISE DUTY:

1. Sales tax on fish feed abolished

2. Sales Tax on Fans and animal feed for dairy farms has been proposed to be abolished.

3. Sales Tax on supply of gas to fertilizer manufacturer has been proposed to be reduced to 5% from 10%

4. Local Stationery items has been proposed to be transferred to zero rating regime

5. Sales tax on Agriculture machinery has been proposed to be reduced to 7 % to 5%.

6. Sales tax on 21 types of Spare parts for local laptop and computer assembling has been proposed to be abolished.

7. Sales tax on paper to be used for printing of Holy Quran has been proposed to be abolished.

8. Sales Tax for unregistered persons under SRO 1125 has been proposed to be enhanced to 9%.

9. Value Addition Tax on import of used clothes and shoes has been proposed to be abolished and local supply of the same has been proposed to be zero rated.

10. Further Tax has been proposed to be enhanced to 3%.

11. Sales tax on supply of LNG has been proposed to be reduced to 17% to 12%.

12. Value addition tax on import of LNG has been proposed to be abolished.

13. Sales tax on fertilizer has been proposed to be reduced to 10 % to 5%.

14. Sales tax on DAP has been proposed to be fixed at 100 rupees per bag.

15. Import of machinery for fertilizer has been proposed to be reduced to10% to 5%.

16. FED on ci******es has been proposed to be enhanced to Rs. 3,964, 1770 and Rs. 848 for Tiers I, II and III respectively.

28/04/2018

TAX AMENDMENTS VIDE FINANCE
BILL 2018 HIGHLIGHTS

INCOME TAX:

1. Threshold limit for Withholding Income tax has been proposed to be enhanced as:
(a). On value of services from Rs. 25,000 to Rs.30,000/-
(b). On value of supplies from Rs. 50,000 to Rs. 75,000/

2. Withholding Income tax rate for non-filers companies has been proposed to be enhanced from 7% to 8% (supply of Goods).

3. Withholding income tax for non-filer non corporate taxpayers has been proposed to be enhanced from 7.75% to 9% (supply of Goods).

4. Tax rates for individuals, as reduced in tax reforms package, has further been amended. Rs. 1,000 and Rs. 2,000 tax has been proposed to be introduced for incomes slabs Rs. 400,001 to Rs. 800,000 and from Rs. 800,001 to 1,200,000, respectively.

5. Maximum slab for AOP has been proposed to be reduced from 35% to 30%.

6. Corporate tax rate has been proposed to be reduced by 1% each year unto 2025.

7. Current Super tax rate which is 4% for banking sector and 3% for non-banking sector, has been proposed to be reduce by 1% each year till the same is abolished.

8. FBR notified rates for property valuation has been proposed to be abolished. However non-filer cannot purchase property valuing higher than Rs. 4 million.

9. Advance tax on purchase of immovable property has been proposed to be 1%, on value declared by purchaser, which would be adjustable.

10. Advance tax on import of coal has been proposed to be reduced to 4% from 6%.

11. Composite Audit (i.e. both income tax and sales tax) will be conducted only once in 3 years.

12. To avail automatic stay of demand, amount of tax liability to be paid has been proposed to be reduced to 10% from 25%.

13. Decision of ADRC has been proposed to be binding on both FBR and taxpayers.

14. Powers of Chief Commissioner and Commissioner have been proposed to be curtailed with respect to search and seizure.

15. Rate of tax on dividend from REIT has been proposed to be reduced to 5% from 12.5%.

16. Tax regime of stock brokers of stock has been proposed to be changed from FTR to NTR.

17. Tax on bonus shares has been proposed to be abolished

18. Cut-off date for tax credits under various section 65B, 65D and 65E have been proposed to be extended till tax year 2021.

19. It has been proposed [possibly in Benami (Transactions) Prohibition Act, 2017] to provide FBR right to acquire the property declared by taxpayer at 200% of declared value.

23/03/2018

Wish you a very happy Pakistan Day. May Allah keep our country progressing and help us play our due role in the development and improvement of our beloved homeland. Aameen.