Income Tax Authorities
Income Tax Authorities
The Federal Board of Revenue
"Federal Board of Revenue" means the Federal Board of Revenue (FBR) established under the Federal Board of Revenue Act, 2007.
Who appointed the FBR?
The Federal Government has appointed the Federal Board of Revenue (FBR) by the authority of the Federal Board of Revenue Act, 2007.
Basic function of the FBR:
Tax collection shall be the basic function of the FBR.
Status of the FBR:
FBR shall be the highest executive authority in Pakistan.
Head of the FBR:
Chairman of the FBR shall be the main authority in the FBR who shall be appointed by the Federal Government.
Members of the FBR:
FBR shall consist of at least seven members who shall be appointed by the Federal Government.
Powers and Functions of the Federal Board of Revenue (FBR):
The FBR has following powers and performs the following functions in the presence of its powers:
1) Approval of research institutions: [26(2)]
The FBR may approve any institution engaged in scientific research in Pakistan as “Scientific Research Institution” so that such institution may claim its scientific research expenditures as deduction against income from business.
2) Approval of employee training scheme: [27(c)]
The FBR may approve a Pakistani employee training scheme against which deduction is allowed to business.
3) Approval of Leasing Companies and Modaraba: [28(3)]
The FBR may approve any leasing company or Modaraba, where lease rental payment made to such company is allowed as deduction against income from business to that person who makes such payment.
4) Approval of charitable institutions: 
The FBR may approve any institution as a charitable institution for the purposes of the Income Tax Ordinance, 2001, especially, for donation purposes.
5) Method of accounting: [32(3)]
The FBR may specify that any class of persons shall record its "Income from Business" on a cash or accrual basis.
6) Apportionment of deductions: [67(2)]
The FBR may make rules u/s 237 for the purposes of apportioning deductions where the expenditure relates to the derivation of more than one head of income.
7) Permission for tax year: 
The FBR may permit person or class of persons to use special tax year instead of normal tax year.
8) Power to demand particular data: 
The FBR may demand any data regarding exempted income of any industrial and commercial organization (By delivering data collection and compilation responsibility to any government or private department)
9) Authority of circulars: 
The FBR may issue circulars to achieve consistency in the administration of the Ordinance and to provide guidance to taxpayers and officers of the FBR.
10) Empowerment of general administration:
The FBR shall exercise the general administration of the Income Tax Ordinance, 2001.
11) Appointment of income tax authorities: 
The FBR may appoint as many income tax authorities as are necessary.
12) Criterion for selection of audit: [177(1)]
The FBR may define criterion to guide the Commissioner of Income Tax that how the CIT select a particular person to conduct audit of its income tax affairs during a particular tax year.
13) Appointment of the auditor: [177(8)]
The FBR may appoint a firm of Chartered Accountants, to conduct an audit of the income tax affairs of any person.
14) Determination of the scope of audit: [179(8)]
The scope of any audit conducted by firm of Chartered Accountants or Cost and Management Accounts shall be determined by the FBR on a case to case basis.
15) Determination of jurisdiction: [209(6)]
Where a question arises as to whether a Commissioner has jurisdiction over a person or not, the question shall be decided by the RCIT or RCITs concerned and, if they are not in agreement, it is determined by the FBR.
16) Authority of approval: 
The FBR may authorize the RCIT or the CIT to grant approval on behalf of the FBR.
17) Registration of income tax practitioners: [223(10)]
The FBR may make rules u/s 237 for the registration of income tax practitioners.
18) Power to make rules: [237(1)]
The FBR may, by notification in the Official Gazette, make rules for carrying out the purposes of the Income Tax Ordinance, 2001.
19) Delegation of powers: [209(2)]
The FBR may delegate all or any of its powers and functions to any income tax authority.
20) Unexplained income or assets:
The FBR may make rules u/s 237 for the procedure of taxation of any unexplained income or asset of any person discovered by any income tax authority.
21) Supervision of subordinate authorities:
The FBR supervises the functions, duties and jurisdiction of its subordinate authorities.
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