FBR takes relief measures to mitigate Covid impact

Shahnawaz AkhterWeb Editor

10th Sep, 2021. 03:37 pm
Corporate tax office

KARACHI: The Federal Board of Revenue (FBR) said it has taken various relief measures to mitigate the impact of the coronavirus pandemic during the fiscal year 2020/21.

The measures have been taken to facilitate commerce, trade, industry, and social sectors in the country.

The revenue board said the construction industry in Pakistan was severely impacted due to the Covid-19. The initiation of extensive construction activity in the country has the potential to contribute significantly towards the revival of the national economy by addressing the issues of increased unemployment anticipated in the aftermath of the pandemic, enhancing tax revenues, supporting businesses, and propelling economic growth and development.

Envisioning the desired objectives, the Tax Laws (Amendments) Ordinance, 2020 was promulgated on April 17, 2020, which contained an incentives package for the construction industry. The same ordinance was subsequently incorporated in the Finance Act 2020.

The promulgation of the Covid-19 Prevention of Smuggling Bill, 2020 aimed at curbing the menace of smuggling of food and other essential commodities with exemplary punishments to create effective deterrence in situation, resulting from the outbreak of the pandemic.

The FBR said it believes in the liquidation of genuine tax refunds of all industries, especially the export-oriented sector. Keeping in view the seriousness of the issue in the aftermath of the Covid-19, the FBR issued/adjusted refunds of around Rs323 billion in FY 2021, which is 85.3 per cent higher than Rs173.5 billion in FY 2020.

In absolute terms, Rs149 billion more has been paid/adjusted as refund during the period under consideration. Speedy clearance of genuine refunds claims resolved the liquidity crunch of industries and they were able to pay salaries to their employees on time, apart from catering to their other business needs.

All the Covid-19-related health equipment (61 items) have been exempted from the sales, income taxes and Customs duty on the recommendations of the health sector, it said.

The FBR exempted Customs duty on the import of highly essential items, which were needed to be imported for the prevention and treatment of the Covid-19, as proposed by the Ministry of National Health Services.

It has envisaged a number of measures in the special circumstances unfolded by the Covid-19 to meet the dual objective of maximising the tax revenues, on the one hand, and promoting economic activities for the revival of the economy, on the other.

A system of automated and expeditious disposal of refunds (FASTER) has been introduced for the sale tax refunds. Similarly, efforts are made to increase the share of direct taxes in revenue collection.

The documentation of the economy to increase incidence of taxation in services, real estate, wholesale, and retail also remains top priority.

The automation of all business processes starting from the registration to assessment has also been initiated. The installation of track and trace, point of sale integration of retailers with the FBR’s system, audit, and e-appeal are at various stages of implementation.

The corporate tax references, personal income tax reforms, reducing dependency of withholding taxes, rationalisation of minimum tax, removal of anomalies, and regressive exemptions, sale tax harmonisation, and promotion of ease of doing business are some of the policy measures to be adopted for revenue mobilisation in the FBR’s efforts to establish itself as a modern, progressive and responsive revenue authority.

Adsence 300X250