The Federal Board of Revenue is the federal agency of Pakistan engaged in the process of collecting revenue for the Government. After independence Central Board of Revenue was working according to Central Board of Revenue Act 1924, and this arrangement continued up to 31 August 1960. Than on the recommendation of the Administrative Re-organization Committee, FBR was made an attached department of the Ministry of Finance.
FUNCTIONS OF FBR / REVENUE DIVISION
The executive head of the board, i.e the Chairman, FBR and Secretary of the Revenue Division has following responsibilities, these are also the functions of FBR:
1.Formulation and administration of fiscal policies
2.Levy and collection of federal taxes
3.Quasi-judicial function of hearing of appeals
Universally accepted principle about taxation is tax according to a person’s ability. A tax levied on income can not be shifted to others, it is progressive in nature, and tends to reduce economic disparity. The rates and methods for tax calculation varies with fiscal status of the tax payer and Government policies. Broad categories of taxpayers are:
-Association of Persons (AOP)
-Non Salaried Individuals
CAPITAL VALUE TAX (CVT)
It is payable by companies, firms, and individuals which acquire an asset by purchase or a right to use for more than 20 years.
CORPORATE ASSET TAX
This is one time levy on the value of fixed assets held by the company on the “specified date” payable as defined in Companies Ordinance 1984.
This tax is chargeable on all imported and locally produced goods except goods specified in sixth schedule to the Sales Tax Act, 1990. Following sectors are chargeable for sales tax and responsible for registration for sales tax:
-Distribution, Wholesale & Retail stage
The Central Board of Revenue issued instructions to all registered persons, companies etc. to file a return on monthly basis by 15th of each month regarding the sales made. For the financial year 2009-10, it is compulsory for registered persons to file returns electronically and return to be submitted on FBR’s e-portal by 18th of that month.
FEDERAL EXCISE DUTY
Taxes levied on the goods traded across the borders provide a major source of revenue to the Government of Pakistan. The Federal Excise Act, 2005 was formally made public with effect from 1st July, 2005. Federal Excise Duty is payable on various items few of them are as under:
-Goods imported into Pakistan
-Goods produced or manufactured in Pakistan
-Services, provided or rendered in Pakistan
Special Excise Duty (SED)
Special Excise Duty (SED) @1% is levied on goods which are manufacture or imported in Pakistan.