To, 3341
09-December-2024
Regional Tax Office Rawalpindi, Federal Board of Revenue, FBR, Government of Pakistan
FBR Directs SAP System Update for Tax Rebate Amendment Compliance:
The Federal Board of Revenue (FBR), Regional Tax Office Rawalpindi, has issued an important directive regarding the incorporation of recent amendments in the SAP system. The directive relates to changes introduced through the Finance Act, 2022, specifically the omission of Clause 2, Part-III, Second Schedule, of the Income Tax Ordinance, 2001. This clause previously granted a 25% tax rebate to full-time teachers and researchers in recognized institutions, a provision that has now been rescinded effective Tax Year 2023. The omission of this clause necessitates immediate updates to the SAP system to ensure compliance and prevent revenue losses. The implementation of these changes is crucial for maintaining fiscal integrity and aligning taxation processes with the latest legal framework. Notification Describes;
FBR
Government of Pakistan
Federal Board of Revenue
Regional Tax Office Rawalpindi
To, 3341
09-12-2024
The Accountant General Pakistan Revenues
Islamabad.
Subject :- INCORPORATION OF AMENDMENT VIS-À-VIS REBATE DISALLOWANCE IN SAP SYSTEM.
Please refer to subject cited above.
2. Through the Finance Act, 2022 applicable from the Tax Year 2023, Clause 2, Part-III, Second Schedule, of the Income Tax Ordinance, 2001 has been omitted. The said clause is reproduced here as,” (2) The tax payable by a full time teacher or a researcher, employed in a non profit education or research institution duly recognized by Higher Education Commission, a Board of Education or a University recognized by the Higher Education Commission, including government 1 [ ] research institution, shall be reduced by an amount equal to 1 [25]% of tax payable on his income from salary 1 [:] 1 [Provided that this clause shall not apply to teacher of medical profession who derive income from private medical practice or who receive share of consideration received from patients.]”
3. During the analysis of data acquired from District Account office Rawalpindi, it has been ascertained that the said changes brought forth by Finance Act 2022 has not been implemented resulting in loss of revenue to national exchequer.
4. In the view of above, SAP system be updated/upgraded to incorporate the required changes which would result in discontinuation of 25% rebate previously allowed to the abovementioned persons. Your Cooperation with Inland Revenue Department will be highly appreciated.
Chief Commissioner
Conclusion:
The timely incorporation of the amendment in the SAP system is imperative to ensure adherence to the revised tax regulations as stipulated in the Finance Act, 2022. By disallowing the previously granted 25% tax rebate, the amendment aims to enhance revenue collection and eliminate discrepancies in tax computations. The FBR emphasizes the importance of collaboration between the Inland Revenue Department and the relevant authorities to facilitate this transition seamlessly. This measure reflects FBR’s commitment to improving the efficiency and accuracy of tax administration, safeguarding the national exchequer, and upholding the integrity of Pakistan’s tax system.
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