ISLAMABAD: In line with the vision of the Prime Minister to provide maximum facilitation to the taxpayers and under the guidance of Chairman FBR, a Centralized Income Tax Refund Office (CITRO) has been established at FBR in order to facilitate taxpayers by releasing income tax refund payments directly into their bank accounts in an expeditious and transparent manner. This would work in an end-to-end automated manner.
Member IR (Operations) inaugurated the launch of CITRO today by processing the 1st batch of Income Tax refund claims for payment through dedicated VPN tunnel established between FBR and State Bank of Pakistan. This is indeed another milestone achieved by the organization through incessant efforts of Member IR Operations and Member IT of FBR. This system would eliminate human interaction between tax authority and taxpayers as well as ensure quick relief to business community.
FBR is in process of enhancing this automation process to the next level by creating linkages between all federal and provincial departments as well as large numbers of withholders so that verification and processing of refund claims can also be made in a machine-enabled environment.
Meanwhile, Federal Board of Revenue (FBR) has clarified news circulating on social media about a proposal to withdraw exemption available to income from exports of computer software or IT services or IT enabled services. FBR has clarified that under the current legal dispensation, the exports of computer software, IT Services or IT enabled services is exempt from tax as provided under clause (133) of Part-I of the Second Schedule to the Income Tax Ordinance, 2001. This exemption is subject to condition that 80% of the export earnings are remitted to Pakistan through normal banking channel. However, the persons claiming exemptions are subject to minimum tax on their turnover.
There is proposal to widen the scope of tax concessions available to income from the export of software, IT services and IT enabled services. For this purpose, the exemption is being shifted to tax credit regime. It has been proposed that such income may be provided hundred percent tax credit against tax liability including minimum tax liability on their turnover. The proposal enhances the scope of concession to the IT sector contrary to the news circulating in social media.
Meanwhile, Federal Board of Revenue (FBR) has urged all the taxpayers to update their profile before the deadline in order to avoid penal consequences under the law. FBR has added that statutory deadline for furnishing/updating of taxpayers’ profile under Section 114A of the Income Tax Ordinance-2001 is 31st March, 2021.