15 percent surcharge on payable income tax: procedure issued by FBR

The major amount of surcharge will be collected by the Federal Board of Revenue (FBR) at the import stage also encompasses advance tax payable by banks and other companies on quarterly basis and leading withholding agents seeking services and purchasing/procuring goods from the suppliers. In this connection, the FBR on Wednesday issued procedure on the implementation of 15 percent surcharge on payable income tax.
The FBR has placed the procedure on its website for guidelines for both the taxpayers as well as the relevant departments for implementation of the surcharge. When contacted, a leading Karachi-based tax expert confirmed that the 15 percent surcharge would be applicable on advance tax payable by the banks. The surcharge is applicable on all kinds of advance tax payments, he added.
The FBR has issued the surcharge implementation procedure to ensure accurate deduction of the surcharge from different categories of taxpayers. According to sources, the FBR instructions have been issued to the State Bank of Pakistan (SBP), National Bank of Pakistan (NBP) and other relevant departments for incorporating the new ''tax payment heads'' under section 4A of the Income Tax Ordinance 2001. The changes in the tax laws have also been communicated to both the NBP and the SBP for proper collection of surcharge. The Pakistan Automation Customs Computerised System (PACCs) and One Customs clearance system implemented surcharge from March 16 2011 as the Income Tax (Amendment) Ordinance, 2011 was promulgated on March 15 (night). The consignments which were cleared on March 15 without payment of 15 percent surcharge will be re-assessed by the customs officials and relevant tax would be collected through additional duty bills ie re-assessment of duty for collection of surcharge, sources added.
In order to collect the surcharge on local supplies, services rendered and advance tax, the FBR has devised the procedure whereby withholding agents and the taxpayers will be able to easily deposit this tax. The procedure has been devised in such a way that no change has been made in the tax deposit form as well as the ''computerised payment receipt''.
By devising the procedure, there is no confusion about the applicability of surcharge at different stages and it is now absolutely clear that it will be payable on the payment transactions made between March 15 2001 and June 30 2011, irrespective of the category of the taxpayer.
The procedure for implementation of 15 percent surcharge on payable income tax said that where a taxpayer wants to pay his self payment such as advance tax payment under section 147 of the Income Tax Ordinance 2001, he will prepare two separate payment slips, ie, one for Actual Tax Payment and second for the 15 percent Surcharge on Income Tax Paid. Hence two separate computerised payment receipts (CPRs) will be generated in such cases by the SBP and NBP.
In cases of withholding tax payments, where the tax is withheld by a withholding agent and the withholding agent is depositing the tax, he will make two entries for each taxpayer in the same payment slip. The application of 15 percent surcharge on payable income tax would be applicable on the salaried persons ie deduction u/s 149 of the Income Tax Ordinance 2001. The employers will deduct the 15 percent surcharge on the income tax payable on portion of the salary pertaining to the period starting from March 15, 2011 to June 30, 2011.
The procedure further said that all withholding agents will deduct 15 percent surcharge on the income tax payable on payments from March 15, 2011 to June 30 2011. To deal with the cases of advance tax payment u/s 147, the tax under the said section would be due from March 15, 2011 to June 30, 2011. The procedure has further that the 15% surcharge on payable income tax must be deposited at the time of deposit of the tax, the FBR added.