The government has given legal cover to foreign remittances through Money Service Bureaus (MCBs), Exchange Companies (ECs) and Money Transfer Operators (MTOs), which would be considered as foreign exchange remitted from outside Pakistan through normal banking channels.

Through the Tax Laws (Third Amendment) Ordinance, 2021, the Federal Board of Revenue (FBR) has clarified that the remittance through MCBs, ECs and MTOs will be considered as through normal banking channels.

Normal banking channels include such as:

• Western Union,
• Money Gram and
• Ria Finance or
• other like entities

Above shall be deemed to constitute foreign exchange remitted from outside Pakistan through normal banking channels as explained under this sub-section.

Foreign remittance through banking channels up to 5 million are not subject to any tax enquiry. This facility was limited to remittances through banks only. Now remittances other than banks’ such as Money Service Bureaus (MCBs), Exchange Companies (ECs) and Money Transfer Operators (MTOs) will also qualify for such a concession.

It is suggested that adequate procedures be introduced to ensure that there is no abuse of this concession and at the same time adequate documentation is available for availing this concession.

ALSO READ: Highlights on Tax Laws Third Amendment Ordinance, 2021

Commissioner In inland Revenue Powers to restore utilities

The FBR or Commissioner Inland Revenue would have full authority to restore mobile phones, mobile phone SMS and connections of electricity and gas, in cases where a person was not liable to file income tax return.

Under the Tax Laws (Third Amendment) Ordinance, 2021, the Board or the Commissioner having jurisdiction over the person mentioned in the income tax general order may order restoration of mobile phones, mobile phone SMS and connections of electricity and gas, in cases where he is satisfied that the return has been filed; or person was not liable to file return under the provisions of the Income Tax Ordinance 2001.

Tax on professionals not appearing in Active Taxpayers List (ATL)

Tax Laws (Third Amendment) Ordinance, 2021 has specified that there shall be collected additional advance tax at the rates given in the Division IV of Part-IV of the First Schedule from professionals not appearing on ATL and operating from residential premises having domestic electric connections from electricity distribution companies. For the purposes of this sub-section professionals include accountants, lawyers, doctors, dentists, health professionals, engineers, architects, IT professionals, tutors, trainers and other persons engaged in provision of services, it added.

Foreign Remittances Through Normal Banking Channels | Foreign Remittances | Normal Banking Channels |