FBR seeks advance tax payment to meet target MOHAMMAD ALI

KARACHI (December 24 2009): The Federal Board of Revenue (FBR) has approached the exploration and production (E&P) companies, banks and associations of persons (AOPs) to ensure early payments of advance tax in December to meet the quarterly revenue target of Rs 336.8 billion.

Sources told Business Recorder on Wednesday that Israr Rauf, Member, Direct Tax, Policy and Domestic Operations (South), who had been to Karachi, had convened a series of meetings with the representatives of banks, E&P companies and AOPs for this purpose.

They said that he persuaded E&P companies and AOPs to ensure early payment of advance tax, which is due on or before January 15, in current month, and also approached banks to pay two-month advance tax in December, which is liable to them on monthly basis. They said that the Finance Act 2009 had issued procedure for payment of advance tax by companies.

Advance tax is payable by a company to the commissioner in respect of the September quarter, on or before the 15th day of October; in respect of the December quarter, on or before the 15th day of January; in respect of the March quarter, on or before the 15th day of April and in respect of the June quarter, on or before the 15th day of June.

Where the taxpayer is a company or an association of persons, advance tax shall be payable by it in the absence of last assessed income or declared turnover also.

The taxpayer shall estimate the amount of advance tax payable on the basis of quarterly turnover of the company or an association of persons, as the case may be, and thereafter pay such amount after, taking into account tax payable under section 113 as provided in sub-section (4AA); and making adjustment for the amount (if any) already paid.

While the payment of advance tax by banks is liable on a monthly basis, they added. Sources said that the move was made after reviewing Q1 result, which depicted only 0.6 percent growth, and added that the collection in Q1 was mainly impacted by the amendment made in advance tax regime. Therefore, the FBR has approached the leading advance tax payers to meet the estimated second quarter target of Rs 336.8 billion, which is 24.4 percent of the annual target.

When contacted, Israr Rauf on his Karachi camp office landline on Tuesday evening denied that he was present in Karachi for the purpose. He said that he did not convene any meeting with representatives of banks, E&P companies and AOPs to discuss advance tax issue. "Instead of asking the leading advance tax payers for early payment, the collecting authority is striving to generate substantial revenue on the accounts of current and arrears demands," he said.