ISLAMABAD: The government has enacted an ordinance introducing new enforcement measures to expand the tax base, empowering the Federal Board of Revenue (FBR) to disable cell phones / SIMS, turn off electricity and gas from those required to file tax returns, to do so however, it does not appear on the Active Taxpayer List (ATL).
The government has also empowered the FBR to shut down gas and electricity for individuals, including Tier 1 retailers, who are either unregistered or, if registered, not within the meaning of Section 3 (9A) of the Sales Tax Act 1990 are integrated.
In the 2001 Income Tax Ordinance, a new Section 114B (Authorization to Enforce the Filing of Returns) was introduced. The Board of Directors has the power to issue a general income tax injunction in respect of persons who do not appear on ATL but who are required to file a declaration under the provisions of this ordinance. The Basic Income Tax Ordinance can have one or all of the following consequences for the persons named therein: blocking of cell phones or cell phone sims; Interruption of the power supply; and breaking off the gas connection.
The Tax Laws (Third Amendment) Ordinance 2021 required Nadra to share data with the FBR in order to expand the tax base, calculate indicative income and identify potential tax evasion. The national database and registration authority passes on its records and all information available or stored by it to the board of directors ex officio or at the request of the board in order to broaden the tax base or to fulfill the purposes of this ordinance.
FBR issues a serious warning to non-applicants
Nadra can submit proposals and information to the Board of Directors to expand the tax base and identify any person, whether taxpayer or not. The Board of Directors may utilize and utilize any information communicated to it by Nadra and forward this information to an income tax authority that is competent in relation to the subject matter of the information, which may use the information.
Another major enforcement measure introduced by the regulation is the change in criminal law for non-applicants. The fine for non-registrants has been increased to 1,000 rupees per day of default. The government has increased penalties for Tier 1 retailers who are not part of the FBR. The government has also imposed an additional input tax on the 5 to 35 percent rates for traders who use household electricity hookups. The professional groups included accountants, lawyers, doctors, dentists, health professionals, engineers, architects, IT professionals, tutors, trainers and others involved in the provision of services.
The government has also increased the additional tax rates on industrial and commercial gas and electricity connections for unregistered individuals.
The government has given zero sales tax to high-fat milk, including those sold in retail packaging under a brand name or brand, and has also withdrawn the exemption for imports of fruit from Afghanistan.
Any spending over Rs. 0.25 million from the corporate sector as ineligible if not paid in digital mode. Salaries over Rs. 25,000 / – per month when paying in digital mode as an allowable expense along with payment through other banking channels.
Under the regulation, the reduced rate of 16 percent sales tax would apply to deliveries from POS-integrated points of sale where payment is made in digital mode; reduced rate of 14 percent for remeltable scrap imported from steel smelters; Reduced tax rate of 5% when importing electric vehicles under CBU conditions and reduced sales tax rate of 16.9% on business-to-business transactions where payment is made in digital mode. In addition, the government has exempted the steel and edible oil sector from collecting the additional tax under U / s 3 (1A) of the Sales Tax Act 1990.
The government has introduced an authorization provision to enable the online marketplace as a withholding agent under the Eleventh Annex to the Sales Tax Act 1990, and also the integration requirement for certain individuals to integrate the billing machines into the board’s computerized system.
Deliberate tax dodgers, non-registrants: New guideline for the establishment of review mechanisms by third parties
With the Tax Act Ordinance (third amendment) 2021, the government introduced an appeal mechanism against the director general’s order. The assessment is intended to be provided by the amendment to Section 25D. Objection can be submitted to the member (customs guideline). A further appeal can be lodged with the High Court against the member’s order (Customs Directive). Subsequent changes in Sections 194A and 196 are also proposed. It is proposed to streamline the re-evaluation mechanism for DGs that have already been assessed. The corporate guarantee to be included in the definition of the hedging instrument for the temporary release. This makes it easier and avoids high financial costs for industrial importers.
The ordinance granted an exception for certain raw materials for syringes suitable for use in cars and an exception for the import of POS devices for all persons.
The FBR has included the “Steel” sector in Clause 24D to provide distributors, dealers, negotiators, wholesalers and retailers with a reduced minimum sales tax rate on par with the cement sector. The government has also included local cell phone manufacturers in clause (11A) Part IV of the second appendix to exempt them from the minimum tax at the level of STZ and SEZ companies. The government also has all of them in Table I of paragraph (66) of the
Part I of the second list in the thirteenth list for tax deducting donations.
The regulation has made it clear that transfer by Money Service Bureaus (MSBs), Exchange Companies (ECs) and Money Transfer Operators (MTOs) such as Western Union, Money Gram and Ria Finance or other similar entities is considered a foreign currency transfer from outside of Pakistan through normal banking channels .
Copyright Business Recorder, 2021
