Tax Brief

🎉 𝐇𝐚𝐩𝐩𝐲 𝐍𝐞𝐰 𝐘𝐞𝐚𝐫 𝐟𝐫𝐨𝐦 𝐓𝐚𝐱 𝐁𝐫𝐢𝐞𝐟! May your tax returns be as simple as this post. 😉 Here's to a year of prosperity, growth, and smooth sailing through the tax season. 💡 What are your tax-related New Year's resolutions? Whether it's staying on top of deadlines, organizing receipts better, or finally understanding that one tricky deduction—let's hear them! Share below. 👇 #HappyNewYear #TaxSeason #TaxTips #TaxResolution #NewYearNewStart

We just had an insightful meeting for the rejuvenation of Tax Brief operations. A big thank you to Muhammad Ahsen Ejaz, Aqib Hussain, Raja Abdul Rafay, and Muhammad Haris for your valuable input. We missed Saad Salman & Hamza Iftikhar Soni, but look forward to collaborating soon. Stay tuned for some exciting updates ahead! 👀💡 #TaxBrief #Taxation #FBR #StayTuned

🌟 𝐖𝐞'𝐫𝐞 𝐁𝐚𝐜𝐤 🌟 After a short hiatus (we missed you!), 𝐓𝐚𝐱 𝐁𝐫𝐢𝐞𝐟 is back in action, ready to keep you updated on everything you need to know about taxes. Whether it's breaking news, simplified guides, or expert insights—our mission remains the same: 𝐦𝐚𝐤𝐢𝐧𝐠 𝐭𝐚𝐱 𝐦𝐚𝐭𝐭𝐞𝐫𝐬 𝐬𝐢𝐦𝐩𝐥𝐞 𝐚𝐧𝐝 𝐚𝐜𝐜𝐞𝐬𝐬𝐢𝐛𝐥𝐞 for everyone. Why the break? Our contributors were busy with their studies (blame the books 📚), but now we're back stronger than ever. Stay tuned for regular updates, because your tax clarity is our priority. 💼 Follow us and stay ahead in your tax game. #TaxMatters #TaxUpdates #SimplifyingTaxes #WeAreBack #FinanceMadeEasy #TaxBrief #FBR

𝐆𝐫𝐞𝐚𝐭 𝐧𝐞𝐰𝐬 𝐟𝐨𝐫 𝐭𝐚𝐱𝐩𝐚𝐲𝐞𝐫𝐬! The FBR has extended the deadline for biometric re-verification for individuals, AOPs, and single-member companies to 𝗔𝘂𝗴𝘂𝘀𝘁 𝟯𝟭, 𝟮𝟬𝟮𝟰. Under the Sales Tax Rules, 2006, these taxpayers were required to undergo biometric re-verification annually in July. However, due to challenges faced by taxpayers, the FBR has exercised its powers under 𝗦𝗲𝗰𝘁𝗶𝗼𝗻 𝟳𝟰 𝗼𝗳 𝘁𝗵𝗲 𝗦𝗮𝗹𝗲𝘀 𝗧𝗮𝘅 𝗔𝗰𝘁, 𝟭𝟵𝟵𝟬 to grant this extension. This provides additional time for compliance and addresses concerns raised by the taxpayer community. Content and Graphics by: Team Tax Brief Stay tuned in for more updates! #FBR #biometricreverification #taxpayers #deadlineextension #NADRA #eSahulat #Pakistan #taxnews #finance #SalesTaxRules2006 #SalesTaxAct1990

𝐓𝐡𝐞 𝐂𝐨𝐦𝐦𝐢𝐬𝐬𝐢𝐨𝐧𝐞𝐫 𝐢𝐬 𝐧𝐨𝐭 𝐩𝐞𝐫𝐦𝐢𝐭𝐭𝐞𝐝 𝐭𝐨 𝐝𝐢𝐬𝐩𝐮𝐭𝐞 𝐨𝐫 𝐫𝐞𝐣𝐞𝐜𝐭 𝐚𝐝𝐯𝐚𝐧𝐜𝐞 𝐭𝐚𝐱 𝐞𝐬𝐭𝐢𝐦𝐚𝐭𝐞𝐬 𝐬𝐮𝐛𝐦𝐢𝐭𝐭𝐞𝐝 𝐮𝐧𝐝𝐞𝐫 𝐒𝐞𝐜𝐭𝐢𝐨𝐧 𝟭𝟰𝟳 𝐨𝐟 𝐭𝐡𝐞 𝐈𝐧𝐜𝐨𝐦𝐞 𝐓𝐚𝐱 𝐎𝐫𝐝𝐢𝐧𝐚𝐧𝐜𝐞, 𝟮𝟬𝟬𝟭. 𝐁𝐚𝐜𝐤𝐠𝐫𝐨𝐮𝐧𝐝: The case involves several petitions challenging notices and demands issued by tax authorities regarding advance tax estimates filed under Section 147 of the Income Tax Ordinance, 2001. The core issue is whether the tax authorities have the authority to reassess and demand additional advance tax payments based on their evaluation of the estimates provided by taxpayers. 𝐀𝐫𝐠𝐮𝐦𝐞𝐧𝐭𝐬 [𝐃𝐞𝐩𝐚𝐫𝐭𝐦𝐞𝐧𝐭]: The department argues that despite the omission of the 2nd Proviso, the Commissioner retains the authority to examine and reassess advance tax estimates to ensure their accuracy. They reference Sections 147(6) & (7) and Section 137(2) of the Ordinance to support their stance. 𝐀𝐫𝐠𝐮𝐦𝐞𝐧𝐭𝐬 [𝐓𝐚𝐱𝐩𝐚𝐲𝐞𝐫]: Petitioners argue that previous court decisions (e.g., Pak Saudi Fertilizer v. Commissioner of Income Tax and Karachi Port Trust v. Commissioner Inland Revenue) have established that the Commissioner does not have the authority to reject or reassess advance tax estimates submitted under Section 147. They emphasize that the 2nd Proviso to Section 147(6), which briefly granted such powers to the Commissioner, was omitted by the Finance Act, 2021. Hence, they contend that the earlier judgments should prevail, and the department’s attempts to reassess the estimates are invalid. 𝐎𝐮𝐭𝐜𝐨𝐦𝐞: The court noted that earlier judgments established that the Commissioner did not have authority under the previous laws to challenge or reject advance tax estimates. This principle remained consistent with the current provisions, even before the 2nd Proviso was added and later omitted. Further, the omission of the 2nd Proviso in 2021 was interpreted as a clear indication that the Commissioner’s authority to reassess estimates was withdrawn. The insertion and subsequent removal of this Proviso were seen as legislative responses to specific issues but ultimately reinforced that such powers were not intended to be permanent. The court acknowledged that new amendments from the Finance Act 2024 reintroduce similar provisions to those of the 2nd Proviso, but these were not applicable to the case at hand as they came into effect after the impugned orders. The court ruled in favor of the taxpayers, affirming that the tax authorities' actions to reassess and demand additional advance tax based on the estimates provided were not in accordance with the law as it stood during the period in question... Content and Graphics by Furqan Ali Stay tuned in to Tax Brief for more tax updates. #caselaw #casestudy #pakistantax #incometax #salestax #fbr

Muhammad Naeem Mir, the chief coordinator of the Tajir Dost Scheme, has presented an alternative plan to the Federal Board of Revenue (FBR) to avoid strikes and agitation over the new tax on shopkeepers and retailers. 🛍️ 𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐒𝐢𝐭𝐮𝐚𝐭𝐢𝐨𝐧: FBR has proposed a tax on shopkeepers based on the estimated income derived from the valuation of the commercial properties they operate in. 𝐀𝐥𝐭𝐞𝐫𝐧𝐚𝐭𝐢𝐯𝐞 𝐏𝐥𝐚𝐧: 𝟏. 𝐒𝐢𝐦𝐩𝐥𝐞 𝐔𝐫𝐝𝐮 𝐓𝐚𝐱 𝐑𝐞𝐭𝐮𝐫𝐧 𝐅𝐨𝐫𝐦: An easy-to-understand agreed income tax form in Urdu for Tier-II retailers shall be launched. 𝟐. 𝐅𝐢𝐱𝐞𝐝 𝐑𝐞𝐠𝐢𝐬𝐭𝐫𝐚𝐭𝐢𝐨𝐧 𝐅𝐞𝐞: A small fee of Rs1,200 shall be imposed to become a registered filer. 𝟑. 𝐓𝐮𝐫𝐧𝐨𝐯𝐞𝐫-𝐁𝐚𝐬𝐞𝐝 𝐓𝐚𝐱: Retailers shall pay 1.5% turnover tax based on their self-declared annual turnover. 𝟒. 𝐍𝐨 𝐓𝐚𝐱 𝐂𝐫𝐞𝐝𝐢𝐭 𝐅𝐚𝐜𝐢𝐥𝐢𝐭𝐲: Newly registered shopkeepers won't have tax credit facilities initially.      This alternative approach aims to simplify the process and avoid complications, helping shopkeepers comply with tax regulations smoothly. 💡 Source: Business Recorder Content and Graphics by: Team Tax Brief Stay tuned in for more updates! #TaxNews #Retailers #Shopkeepers #TajirDostScheme #FBR #TaxPlan #Pakistantax

𝐖𝐡𝐨 𝐢𝐬 𝐚 𝐥𝐚𝐭𝐞 𝐟𝐢𝐥𝐞𝐫? 𝐃𝐞𝐟𝐢𝐧𝐢𝐭𝐢𝐨𝐧: A person appearing on the active taxpays‘ list who have not filed the return by the due date or extended due date 𝐀𝐧𝐲 𝐄𝐱𝐜𝐥𝐮𝐬𝐢𝐨𝐧:  Any person who has filed return by due date or extended due date for all of the last three tax years preceding the tax year for which the return has not been filed by the due date. 𝐈𝐦𝐩𝐨𝐫𝐭𝐚𝐧𝐜𝐞: Understanding this concept is important because in recent tax amendments separate and increased tax rates have been introduced for this category of taxpayers especially on sale and purchase of immoveable property. 𝐅𝐮𝐫𝐭𝐡𝐞𝐫 𝐂𝐥𝐚𝐫𝐢𝐟𝐢𝐜𝐚𝐭𝐢𝐨𝐧: It is expected that FBR will clarify this concept further in its explanatory SRO on Changes made through Finance Act 2024. 𝐑𝐞𝐟𝐞𝐫𝐞𝐧𝐜𝐞:  Rule 1A of the Tenth Schedule to the Income Tax Ordinance, 2001 Content and Graphics by: Team Tax Brief Stay tuned in for more tax updates. #pakistan #pakistantax #incometax #filer #nonfiler #latefiler #fbr

𝐒𝐮𝐩𝐫𝐞𝐦𝐞 𝐂𝐨𝐮𝐫𝐭 𝐰𝐚𝐬 𝐚𝐬𝐤𝐞𝐝 𝐰𝐡𝐞𝐭𝐡𝐞𝐫 𝐨𝐫 𝐧𝐨𝐭 𝐆𝐨𝐯𝐭 𝐂𝐚𝐧 𝐏𝐫𝐨𝐦𝐢𝐬𝐞 𝐭𝐚𝐱 𝐜𝐫𝐞𝐝𝐢𝐭 𝐚𝐧𝐝 𝐭𝐡𝐞𝐧 𝐭𝐚𝐤𝐞 𝐢𝐭 𝐚𝐰𝐚𝐲 𝐫𝐞𝐭𝐫𝐨𝐬𝐩𝐞𝐜𝐭𝐢𝐯𝐞𝐥𝐲? In a recent legal issue, Pakistan's Supreme Court discussed whether the government can take away tax credits promised to businesses after they've already invested money based on those promises. The issue started with the Finance Act of 2018, which offered companies a 10% tax credit for upgrading their machinery. Big textile companies like Gul Ahmed and Sapphire took up this offer and spent a lot of money to modernize their plants. But later, the government tried to cancel this tax credit, even for investments made between July 2018 and June 2019. After petitions were filed, the Sindh High Court ruled in favor of the companies in February 2023. They said that once companies had invested in good faith, those transactions were finished and couldn't be changed later. The Federal Board of Revenue (FBR) appealed this decision to the Supreme Court. Advocate Raashid Anwer, who represented the textile industry, pointed out similar situations in the past where the government had done the same thing in 1989. He also mentioned previous court cases that supported the idea that once transactions are completed, they can't be undone later by new laws. Anwer argued that if the government breaks promises like this, it will hurt its trustworthiness and could discourage future investments, which are really important for the country's development. The Supreme Court's decision on this case will affect economic policies and how confident investors feel about putting money into Pakistan. Source: Business Recorder Content and Graphics by: Team Tax Brief Stay tuned in for more tax updates. #fbr #supremecourt #pakistan #pakistantax #taxcredit

Expanding Tax Exemption for Immovable Properties Effective from July 1, 2024, the government has extended the scope of withholding tax exemption under section 236C on the first sale of government-allotted immovable properties. This exemption, originally introduced in 2016 for dependents of Shaheeds (martyrs), has now been broadened under the Finance Act, 2024. 𝐈𝐧𝐢𝐭𝐢𝐚𝐥𝐥𝐲 𝐥𝐢𝐦𝐢𝐭𝐞𝐝 𝐭𝐨 𝐭𝐡𝐞 𝐟𝐢𝐫𝐬𝐭 𝐬𝐚𝐥𝐞 𝐨𝐟 𝐩𝐫𝐨𝐩𝐞𝐫𝐭𝐢𝐞𝐬 𝐛𝐲 𝐝𝐞𝐩𝐞𝐧𝐝𝐞𝐧𝐭𝐬 𝐨𝐟 𝐒𝐡𝐚𝐡𝐞𝐞𝐝𝐬 𝐟𝐫𝐨𝐦 𝐭𝐡𝐞 𝐏𝐚𝐤𝐢𝐬𝐭𝐚𝐧 𝐀𝐫𝐦𝐞𝐝 𝐅𝐨𝐫𝐜𝐞𝐬 𝐨𝐫 𝐟𝐞𝐝𝐞𝐫𝐚𝐥/𝐩𝐫𝐨𝐯𝐢𝐧𝐜𝐢𝐚𝐥 𝐠𝐨𝐯𝐞𝐫𝐧𝐦𝐞𝐧𝐭, 𝐭𝐡𝐞 𝐞𝐱𝐞𝐦𝐩𝐭𝐢𝐨𝐧 𝐧𝐨𝐰 𝐢𝐧𝐜𝐥𝐮𝐝𝐞𝐬 𝐰𝐚𝐫-𝐰𝐨𝐮𝐧𝐝𝐞𝐝 𝐢𝐧𝐝𝐢𝐯𝐢𝐝𝐮𝐚𝐥𝐬, 𝐞𝐱-𝐬𝐞𝐫𝐯𝐢𝐜𝐞𝐦𝐞𝐧, 𝐚𝐧𝐝 𝐜𝐮𝐫𝐫𝐞𝐧𝐭 𝐞𝐦𝐩𝐥𝐨𝐲𝐞𝐞𝐬 𝐨𝐟 𝐚𝐫𝐦𝐞𝐝 𝐟𝐨𝐫𝐜𝐞𝐬 𝐚𝐧𝐝 𝐠𝐨𝐯𝐞𝐫𝐧𝐦𝐞𝐧𝐭 𝐬𝐞𝐫𝐯𝐢𝐜𝐞𝐬. This move aims to further support those who have dedicated their lives to public service. Information Minister Ataullah Tarar highlighted the significance of these exemptions during a recent press conference, emphasizing their role in honoring the service and sacrifice of military personnel's families and retired high-ranking bureaucrats. Source: Business Recorder Graphics and Content By: Team Tax Brief Stay tuned in for more tax updates. #fbr #pakistantax #incometax #immoveableproperties #capitalgaintax

𝐒𝐚𝐥𝐞𝐬 𝐭𝐚𝐱 𝐜𝐡𝐚𝐫𝐠𝐞𝐝 𝐚𝐧𝐝 𝐧𝐨𝐭 𝐩𝐚𝐬𝐬𝐞𝐝 𝐨𝐧 𝐭𝐨 𝐭𝐡𝐞 𝐞𝐧𝐝 𝐜𝐨𝐧𝐬𝐮𝐦𝐞𝐫 𝐢𝐬 𝐚𝐥𝐥𝐨𝐰𝐚𝐛𝐥𝐞 𝐚𝐬 𝐚 𝐝𝐞𝐝𝐮𝐜𝐭𝐢𝐨𝐧. 𝐁𝐚𝐜𝐤𝐠𝐫𝐨𝐮𝐧𝐝: This case involves Capital Foods (Private) Ltd., a bakery business, contesting a disallowance made by the Commissioner of Inland Revenue (Zone-I, Islamabad) for the tax year 2018. The company claimed "sales tax consumed" as part of their cost of sales on their tax return, but the department disallowed it. 𝐀𝐫𝐠𝐮𝐦𝐞𝐧𝐭𝐬 [𝐃𝐞𝐩𝐚𝐫𝐭𝐦𝐞𝐧𝐭]: Section 21(a) of the Income Tax Ordinance disallows Sales Tax paid even if not passed unto end consumer. 𝐀𝐫𝐠𝐮𝐦𝐞𝐧𝐭𝐬 [𝐓𝐚𝐱𝐩𝐚𝐲𝐞𝐫]: The sales tax was paid on purchases, not profits. It is a legitimate business expense to calculate the true cost of goods sold and the actual gross profit. Section 21(a) only applies to taxes levied on profits or gains, not to sales tax on purchases. 𝐎𝐮𝐭𝐜𝐨𝐦𝐞: ATIR ruled in favor of Capital Foods (Pvt) Ltd. Sales tax paid on purchases is a deductible business expense if it is not passed on to the end consumer. The tax department's disallowance under Section 21(a) was incorrect, as it applies to tax paid or payable on income/gain, whereas sales tax is charged on sale/purchase rather than income/gain. Content and Graphics by Furqan Ali Stay tuned in to Tax Brief for more tax updates. #caselaw #casestudy #pakistantax #incometax #salestax #fbr