Tax payment process: FBR takes 577 hours/ annum against world average of 108 hours

LAHORE: The Federal Board of Revenue (FBR) takes around 577 hours per annum to complete the tax payment process compared to the world average of 108 hours, said sources.

LAHORE: The Federal Board of Revenue (FBR) takes around 577 hours per annum to complete the tax payment process compared to the world average of 108 hours, said sources.

The sources added that the current documentation drive would prove ineffective and rather counterproductive in the presence of the high cost of compliance. This cost consists of the number of hours required for record-keeping, tax planning, and forms completion and submission.

They said some 47 types of payments increase the average tax burden tremendously in the country. An intriguing example of a high compliance cost for meeting the documentary requirements can be observed in customs. To complete an international trade transaction, we require more than 400 hours (17 days). India and Korea, on the other hand, required 270 and 194 hours, respectively, they added.

Also, they said, 66 withholding taxes furnished almost 3/4th of direct tax revenues. However, 45 of these withholding taxes provide only 2 percent of the revenues. About 70 percent of tax revenue is collected through withholding tax agents such as banks, utilities, and telecoms, placing the burden of collection on these businesses and increasing their costs. While these withholding taxes may provide an easy source of revenue collection for the FBR, they make the tax system incredibly complex for the taxpayers. The high compliance cost imposed on businesses being unpaid tax collectors for the government is the very reason for tax non-compliance. In such an unconducive environment, the current documentation drive would kill transactions and with it any hopes of increasing economic growth and sustainable revenue streams.

FBR release two years financial Bill

The revenue collection in the first two months of previous year 2019-20 was 582 billion.

ISLAMABAD (Dunya News) – Federal Board of Revenue (FBR) has released the revenue collection information of first two months of current financial year i.e. July & August-2020.

According to the released information, against the assigned revenue target of Rs.551 billion, FBR has collected Rs.593 billion thus showing an increase of 42 billion and 108 percent of the assigned target. The revenue collection in the first two months of previous year 2019-20 was 582 billion whereas it is increased to 593 billion this year.
To redress the hardships of the business community caused by Covid-19, refunds to the tune ofRs.30.6 billion have been disbursed collectively in the first two months of FY-2020, as compared to refunds of Rs.11 billion during first two months of FY-2019.Sales Tax refunds are being issued under centralized and automated system called FASTER which is clearing refunds to exporters within 72 hours for the first time as committed by the Government.

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FBR tax collection surpasses Rs551 bn target

ISLAMABAD: The Federal Bureau of Revenue (FBR) has surpassed its envisaged tax collection target by Rs39 billion in the first two months (July and August) 2020 as the tax authorities fetched Rs593 billion revenues against the assigned target of Rs551 billion.

However, the FBR has failed to manage the assigned target of August 2020 as the tax collection stands at Rs293 billion against the fixed target of Rs308 billion. Owing to the marvelous performance of the first month (July 2020) whereby the taxcollection surpassed by Rs57 billion against the target of Rs243 billion, the overall collection so far showed surpassing the desired target.

Independent tax experts say the FBR will have to collect Rs376 billion in September 2020 for achieving the desired tax collection target of Rs969 billion for the first quarter (July-Sept) period of the current fiscal year.

They believe if the FBR failed to surpass the desired target with substantial margin in the first quarter, then the IMF will come up with prescription of a mini-budget in the second half to materialize the desired target of Rs4,963 billion for whole financial year.

According to FBR’s announcement made on Monday night, the FBR collected Rs593 billion against the revenue target of Rs551 billion in first two months of current fiscal year 2020-21. The FBR has released the revenue collection information of first two months of current financial year i.e. July & August-2020.

FBR inquiry against officials

ISLAMABAD: Prime Minister Imran Khan is yet to give go-ahead to the Federal Board of Revenue (FBR) for initiating an inquiry against two senior officials of the tax machinery in Grade 20.

The request to prime minister for initiating an inquiry was sought last month. However, the FBR’s Integrity and Performance Management Unit (IPMU) has become fully functional and so far, it has suspended 76 officials on corruption charges and dismissed 10 officials.

The FBR high-ups conceded that Adviser to the PM on Finance Dr Abdul Hafeez Shaikh was not happy with the working of IPMU and work was underway to propose changes in the working system bring more improvements.

Briefing reporters in a joint press conference at the FBR Headquarters here on Monday, spokesman Nadeem Rizvi, Member Human Resource Management Hafiz Muhammad Ali Indhar and Member Administration Bakhtyar Mohammad said the prime minister had instructed completionof all the inquiries within 90 days in order to take a stern action against the corrupt officers.

They said the FBR had not received any red letter from the PM’s Complaint Cell and all 355 complaints received from the PM Office had been disposed of properly. To another query against the officers who provided rewards in Karachi and Quetta, the FBR’s Member Administration said no legal violation had been made while providing multiple rewards to officers. I am interested

Trade facilitation: FBR to issue ‘gold’, ‘platinum’, ‘silver’ certificates to AEOs

ISLAMABAD: The Federal Board of Revenue (FBR) will issue gold, platinum and silver certificates to the Authorised Economic Operators (AEOs) for providing them a wide range of benefits including trade facilitation, speedy clearance of imports and exports consignments and timely payment of refunds/duty drawback to the holders of such certificates.


The FBR has issued draft Authorized Economic Operator Rules Monday.

Under the new rules, the FBR will issue gold and platinum certificates to importers or exporters and silver certificate may be granted to categories of economic operators other than importers and exporters, including Logistics Providers, Custodians or Terminal and off-dock terminal Operators, Customs Agents and Warehouse Operators. The validity of AEO certificate shall be two years for Gold, three years for Platinum and Silver.

The authorised economic operator or AEO means a certified entity which fulfills the security criteria and other laid down obligations and derives benefits as prescribed under these rules and may include manufacturers, importers, exporters, custom house agents, brokers, shipping lines, carriers, consolidators, intermediaries, ports operators, airports operators, terminal operators, integrated operators, warehouses, distributors, freight forwarders and logistic service providers.

In case of importers and exporters, at the time of filing of AEO application, annual turnover of the business must be US$2.5 million or above while applying for gold or platinum status, FBR said.

The benefits for gold status included priority placement/front line of treatment shall be accorded under WeBOC module for all processes including assessment, examination and scanning to ensure shorter cargo release time; facility of Direct Port Delivery (DPD) of their import Containers and or Direct Port Entry(DPE) of their Export Containers would be available.

A special space shall be earmarked at port or terminal area for handling AEO containers for speedy clearance and ID cards to be granted to authorized personnel for hassle free entry to Custom Houses, terminals, off-dock terminals and dry ports and wherever feasible, they will get separate parking space and sitting/waiting area earmarked in Custom Houses, terminals, off-dock terminals, dry ports etc.

In case they are required to furnish a Bank Guarantee, the quantum of the Bank Guarantee would be fifty percent of that required to be furnished by an importer and exporter who is not an AEO Certificate Holder; and will provide PDC or corporate guarantee for the remaining fifty percent and they will not be subjected to regular transactional PCA, instead of that onsite entity based PCA will be conducted. They will be allowed 24/7 clearances on request, if required, at all customs clearance stations. In case where laboratory analysis is required for assessment purposes, the sample from AEO consignment shall be retrieved and consignment shall be released provisionally except for agricultural goods; and the duty drawback claims filed through Customs Computerized System along with Bank Credit Advice (BCA) shall automatically be placed at top of the queue and processed on priority. The refund claims of Sales Tax and Federal Excise Duty, after submission of complete documents, shall be processed on priority.

The benefits for Platinum status may be provided over and above the benefits offered in, Gold category. They shall get trade facilitation by a foreign Customs administration with whom Pakistan enters into a mutual recognition agreement or arrangement.

In case they are required to furnish a Bank Guarantee/pay order, the AEO Certificate Holder may provide Post Dated Cheque or corporate guarantee for the required amount. They shall be given choice of location for control and clearance (on-site inspection and examination) of goods at the premises of the authorized economic operator. The random select on for checks, without prior approval from FBR, will be avoided by other government agencies. An approach based on specific information and Risk based interventions, in case of requirements originating from the Acts administered by other Government Agencies and Departments, will be adopted for providing better facilitation in imports and export of their consignments.