TaxationPk

The Sindh Revenue Board (SRB) has invited stakeholders to submit proposals for the upcoming Budget 2025-26, emphasizing a collaborative approach to fiscal planning. The SRB aims to incorporate valuable insights from taxpayers and industry representatives to ensure a balanced and effective taxation framework. The notification invites suggestions on the Sindh Sales Tax on Services Act, 2011, and its associated rules, including those pertaining to withholding tax, services provided by cab aggregators, online business integration, and tax on specified services. The SRB has a long-standing tradition of engaging with stakeholders in the budgetary process. This year, the board encourages participation from Chambers of Commerce and Industry, business councils, trade associations, tax bars, professional accountancy bodies, and individual taxpayers. Stakeholders are encouraged to submit their proposals by January 31, 2025, to allow for thorough review and consideration. The SRB is seeking suggestions that address industry-specific challenges, enhance tax compliance, and propose innovative solutions for expanding the tax base while minimizing the burden on businesses. The annual budget plays a crucial role in driving Sindh's economic development. By incorporating stakeholder input, the SRB aims to create a tax regime that is both practical and progressive, contributing to a stable and growth-oriented economic environment in the province. #TaxationPk #TaxLaws #TaxUpdates #FBR #SRB #Budget2026

In a significant ruling, the Appellate Tribunal Inland Revenue (ATIR) has emphasized the importance of timely action by the Federal Board of Revenue (FBR) in executing tax demands. The Tribunal held that long delays by FBR officials in serving tax orders can be grounds for condoning delays in taxpayers' appeals. The case, argued by tax lawyer Waheed Shahzad Butt, highlighted the need for a more lenient approach towards taxpayers seeking condonation of delays in revenue matters. Butt argued that such decisions should not be based solely on technicalities but should consider principles of justice and fairness. The ATIR underscored the mandatory requirement for proper service of tax orders to taxpayers before initiating any recovery proceedings. The Tribunal emphasized that failure to serve the taxpayer creates a procedural gap and undermines the legitimacy of recovery actions. The ruling states, "We were completely unaware of any confirmation of outstanding tax demand or the issuance of any adverse order until receipt of the recent recovery notice dated 04.12.2024." The Tribunal further noted that the absence of any prior notices or appellate orders from the FBR constituted a significant delay in the recovery process. Acknowledging the taxpayer's argument that the delay was not deliberate due to the FBR's inaction, the ATIR granted the application for condonation of delay. The Tribunal stated, "In the circumstances, the delay is not deliberate, therefore, we accept the request of the taxpayer and condone the delay." This ruling serves as a crucial reminder for the FBR to act promptly and efficiently in executing tax demands while ensuring strict adherence to procedural safeguards and upholding the principles of natural justice and taxpayer rights. #TaxationPk #TaxNews #TaxUpdates

Punjab Government Collects Rs. 650 Billion Through e-Pay Platform Lahore: The Punjab government has collected a significant amount of Rs. 650 billion in tax revenue through its e-Pay Punjab platform, a digital initiative developed by the Punjab Information Technology Board (PITB) in collaboration with the Punjab Finance Department. The e-Pay platform, which enables citizens to pay 86 types of taxes and fees related to 18 government departments online, has processed over 73.94 million transactions to date. This digital solution has streamlined tax payments, reducing the need for citizens to visit government offices and eliminating the potential for exploitation by middlemen. "This initiative has not only improved the ease of doing business for citizens but also significantly contributed to the provincial exchequer," said PITB Chairman Faisal Yousaf during a progress review meeting held on Wednesday. The e-Pay platform is a testament to the Punjab government's commitment to digital transformation and enhancing public service delivery. By leveraging technology, the government is streamlining processes, improving efficiency, and enhancing transparency in revenue collection. #TaxationPk #TaxNews #TaxUpdates

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The Federal Board of Revenue (FBR) has recently passed a new tax law that has been certified by the President and implemented into the legal framework. This law significantly increases the tax rate for banking companies. For the tax year 2025, the corporate tax rate on banking companies has been raised from 39% to 44%. In subsequent years, the rates will gradually decrease: 43% in 2026 and 42% in 2027. However, there are no changes to tax rates for small or other non-banking companies. This adjustment has a multifaceted impact. First, the banking companies themselves are directly affected. Beyond the base corporate tax rate, banks also pay additional taxes such as the super tax (up to 10%) and the ADR tax (advance-to-deposit ratio tax). The ADR tax applies when a bank's advance-to-deposit ratio is less than 50%, resulting in an extra tax burden that can reach 16%. When combined, these taxes have pushed the effective tax rate for some banks to as high as 65%, though the average effective rate is closer to 55%. This heavy taxation has created challenges for the banking sector. In response to the ADR tax, some banks introduced additional service charges for high deposits, leading to significant withdrawals by customers. The backlash prompted intervention by the State Bank of Pakistan, which led banks to reverse these charges. The Pakistan Bank Association (PBA), representing the banking sector, has also been in discussions with the FBR and State Bank to address these issues, highlighting concerns about promoting a cash economy due to declining deposits. For the stock market, the tax increase impacts the earning per share (EPS) of banking companies. EPS, calculated as profit after tax divided by the total number of shares, directly affects investor confidence. With higher taxes, profits after tax shrink, reducing EPS. For instance, if a bank’s profit before tax is 100 million rupees, under the previous 39% tax rate, the profit after tax would be 61 million rupees. Under the new 44% rate, this drops to 56 million rupees, marking a 10% decrease in EPS. This reduction is likely to lead to a decline in bank share values, discouraging investments in the sector. The general public also bears the brunt of these changes. Banks are businesses with profit targets, and when tax rates rise, they tend to pass on the burden to their customers. Since banks cannot easily adjust funded income (interest rates on loans and advances are market-driven), they often increase non-funded income by raising fees for services such as ATM withdrawals, debit card charges, locker fees, and more. Consequently, individuals maintaining accounts with banks can expect higher service charges in the coming months. #TaxUpdates #FBR #TaxationPk #TaxLaws

The National Highways Authority (NHA) has announced a significant increase in toll taxes on major highways and motorways across the country, effective January 5, 2025. This marks the third toll hike within the past seven months, aimed at achieving a revenue target of Rs102 billion by the end of the current fiscal year. The toll increases impact several key routes, including the Islamabad-Peshawar Motorway (M-1), Lahore-Abdul Hakeem Motorway (M3), Pindi Bhattian-Faisalabad-Multan Motorway (M4), Multan-Sukkur Motorway (M5), D I Khan-Hakla Motorway (M14), and the Mansehra Expressway. Revised Toll Rates: M-1 (Islamabad-Peshawar): Cars: Rs. 500 (previously Rs. 460), Wagons: Rs. 750 (previously Rs. 720), Buses: Rs. 1,450 (previously Rs. 1,300), Trucks: Rs. 2,300 (previously Rs. 1,950) National Highways: Cars: Rs. 60 (previously Rs. 50), Wagons: Rs. 100 (previously Rs. 80), Buses: Rs. 200 (previously Rs. 170), 2 & 3-axle Trucks: Rs. 250, Articulated Trucks: Rs. 500 (previously Rs. 460) M-3 (Lahore-Abdul Hakeem): Cars: Rs. 700 (previously Rs. 650) M-4 (Pindi Bhattian-Faisalabad-Multan): Cars: Rs. 950 (previously Rs. 850) M-5 (Sukkur-Multan): Cars: Rs. 1,100 (previously Rs. 1,050) M-14 (Dera Ismail Khan-Hakla): Cars: Rs. 600 Impact on Commuters: These repeated toll hikes have significantly increased the burden on commuters. In addition to the latest increases, tolls have also been raised at key locations such as the Kohat Tunnel (N55), Islamabad-Murree-Kohala Highway (N75), and Mianwali Toll Plaza (N135). Revenue Target: The NHA aims to generate Rs102 billion in revenue during the current fiscal year, a substantial increase from the Rs64 billion collected in the previous year. The frequent toll hikes have raised concerns among commuters and the public about the increasing cost of transportation. There are concerns that these repeated increases may impact the affordability of travel for many citizens. #TaxNews #TaxationPk #TaxLaws #TaxUpdates

Do You Know that the FBR is using data analytics to crack down on fake invoices? Businesses are advised to maintain accurate and transparent records of all transactions to avoid scrutiny and potential penalties. The FBR's new tool is designed to identify and target those engaging in fraudulent activities. #TaxationPk #TaxLaws #TaxUpdates #FBR #FakeInvoices #TaxCompliance #Business #DataAnalytics #TaxEvasion #Pakistan

Do you know Pakistan’s tax system could be simplified to a one-page return form like other developed countries? The Pakistan Business Forum is pushing for this change to encourage compliance and make life easier for taxpayers. Simplification could lead to more filers and less hassle! Find out how this reform could impact you. #TaxationPk #TaxTalks #TaxFacts #TaxNews #TaxReform 

Happy New Year 2025! Wishing you a year filled with joy, success, and prosperity. May your dreams take flight and your aspirations soar to new heights. #HappyNewYear #NewBeginnings #2025 #TaxationPk

Pakistan Updates Tax Laws: What Businesses Need to Know Pakistan has introduced new changes to its tax laws with the Income Tax (Amendment) Ordinance, 2024. These changes primarily affect banks, with some clarifications for other businesses. Here's a simplified breakdown: Higher Taxes for Banks (Temporarily): • Banks will pay a higher tax rate of 44% in 2025. • This rate will decrease to 43% in 2026 and 42% in 2027 and onwards. • The government expects to collect around Rs. 70 billion from this increase by the end of 2024. No Change for Most Other Businesses: • Small businesses will continue to pay 20% tax. • Other companies will continue to pay 29% tax. Clearer Rules for Banks' Finances: The new rules also clarify how banks should calculate their "advances to deposit ratio." This is a key financial measure for banks, and the new rules define it as the total advances and deposits at the end of the financial year, as shown in the audited accounts. What This Means: The main takeaway is that banks will face a temporary tax increase, while other businesses will see no changes to their tax rates. The new rules also provide more clarity for banks on how to calculate important financial ratios. #TaxationPk #TaxNews #TaxUpdates #TaxLaws