TX A The Pakistan tax system and its administration

Which of these is a direct tax?

• 1 Customs duty
• 2 Income tax
• 3 Sales tax
• 4 Excise duty

Which body administers federal taxes such as income tax and federal sales tax in Pakistan?

• 1 The Supreme Court
• 2 The Provincial Assembly
• 3 The State Bank
• 4 The Federal Board of Revenue

What is the legal effect of an FBR circular?

• 1 It is a statute
• 2 It binds the courts
• 3 It explains how the FBR will apply the law but does not change the law
• 4 It overrides the Ordinance

What is the difference between tax avoidance and tax evasion?

• 1 Avoidance is legal planning to reduce tax, and evasion is illegal
• 2 They are the same
• 3 Evasion is legal and avoidance is illegal
• 4 Both are always legal

What does a system of self-assessment mean?

• 1 The taxpayer does not need to file
• 2 The tax authority calculates all tax
• 3 Tax is paid only after an audit
• 4 The taxpayer calculates the tax and files a return that is treated as the assessment

When is a best judgement assessment made?

• 1 When a company is formed
• 2 When a return is filed on time
• 3 When the tax is refunded
• 4 When a person has not filed a return and the Commissioner issues a notice

Where is the first appeal against an assessment normally made?

• 1 To the Commissioner (Appeals)
• 2 To the FBR chairman only
• 3 Directly to the High Court
• 4 To the company secretary

Withholding tax is deducted at 15 percent from payments to persons on the Active Taxpayers' List. What is the rate for a person who is not on the list?

• 1 15 percent
• 2 7.5 percent
• 3 Nil
• 4 30 percent