As per sub-section (1) of section 216 of the Ordinance, public servants are not authorized to disclose any particulars contained in any statement made, return furnished, or accounts or documents produced under the provisions of the Ordinance; any evidence given, or affidavit or deposition made in the course of any proceedings under this Ordinance barring proceedings under Part XI of Chapter X of the Ordinance and any record of assessment proceedings or any proceeding relating to the recovery of a demand.
However, disclosure of such information is permissible in specific circumstances and to specific persons delineated under sub-section (3) of section 216 of the Ordinance.
Through the Finance Act, 2017 the scope of disclosure of information by FBR has been extended to the Employees Old Age Benefit Institution in respect of information regarding salaries furnished through withholding tax statements filed under section 165 of the Income Tax Ordinance, 2001. Disclosure of such information shall enable EOBI to cross check information regarding the number of employees and salaries being disbursed by various employers and shall assist EOBI in preventing revenue leakages.
Scope of Advance Ruling under Section 206A of the Ordinance to be extended: Prior to the Finance Act, 2017, the scope of Advance Ruling under section 206A of the Ordinance was restricted to a non-resident In order to facilitate and bring about a certain degree of predictability for non-resident taxpayers having a permanent establishment in Pakistan in respect of decisions regarding their business and investment strategies, the scope of Advance Ruling under section 206A of the Ordinance has been extended to non-resident taxpayers having a permanent establishment in Pakistan.
Expansion in scope of authorities liable to collect tax on real estate transactions (Section 236C, Section 236K and Section 236W): Prior to the Finance Act, 2017, the obligation to collect tax under sections 236C, 236K and 236W of the Ordinance lay with any person responsible for "registering or attesting transfer of any immovable property". However, the term "registering or attesting transfer" was being misinterpreted restrictively as being applicable only to provincial registration authorities. Moreover, certain cooperative societies etc were of the opinion that they are neither responsible for registering nor attesting transfer of immovable properties as they simply transferred allotments. Appropriate amendment has been made in accordance with legislative intent through the Finance Act, 2017 whereby the term "registering or attesting transfer" has been extended to also include a person "recording transfer" of such immovable property. This shall circumvent any attempt to avoid collection of taxes on sale/purchase of immovable property by cooperative societies, authorities etc.
In order to elucidate the existing /prevalent law an explanation has also been added in sections 236C, 236K and 236W of the Ordinance whereby a local authority, housing authority, housing society, co-operative society and a registrar of properties has also been specifically clarified to fall within the purview withholding agents obliged to collect tax' under section 236C, 236K and 236W of the Ordinance. Such explanation shall be applicable retrospectively as it merely explains the prevalent law.
Minimum tax on immovable property acquired and sold in the same Tax Year [Section 236C]: Prior to the Finance Act, 2017, if an immovable asset was purchased and sold in the same year the capital gain arising from the sale of such immovable asset was zero if the FBR notified rates for immovable property remained static during the currency of the Tax Year.
In order to cater for the aforementioned situation, if immovable property is purchased and sold within the same Tax Year the tax collected under section 236C of the Ordinance on the sale/transfer of property shall forthwith constitute minimum tax in respect of the seller/transferor of such property.
Advance Tax on Tobacco [Section 236X]: A new provision has been introduced through the Finance Act, 2017 whereby the Pakistan Tobacco Board or its contractors are now legally obliged to collect advance tax @ 5% of the purchase value of tobacco from every person purchasing tobacco (including manufacturers of cigarettes) at the time of collecting cess on tobacco directly or indirectly, FBR added.
Copyright Business Recorder, 2017