Federal Board of Revenue (FBR) MCQs

Federal Board of Revenue (FBR)

The Central Board of Revenue became Federal Board of Revenue in July 2007 by the enactment
of FBR Act 2007. The current chairman of FBR is Dr. Muhammad Irshad.

Function of FBR / Revenue Division

The Chairman FBR is the executive head of the Board as well as Secretary of the Revenue
Division. He (or She) has the responsibility for:

 Formulation and administration of fiscal policies

 Levy and collection of federal taxes, and
 Quasi-judicial function of hearing of appeals.

Chief Commissioners Large Taxpayer Units (LTUs)

Three posts of Chief Commissioner Inland Revenue Large Taxpayers Unit (LTUs) were
established to provide convenience to the Large Taxpayers.

These three posts are:

1. Chief Commissioner Inland Revenue Large Taxpayer Unit Karachi

2. Chief Commissioner Inland Revenue Large Taxpayer Unit Islamabad
3. Chief Commissioner Inland Revenue Large Taxpayer Unit Lahore

These three Chief Commissioners LTUs are responsible for:

 All matter relating to administrative control
 Generation of revenue within jurisdiction
 Enforcement/collection of revenue
 Facilitation of Taxpayer
 All legal issues pertaining to the jurisdiction
 Any other assignment by the chairman.

They are assisted by Commissioner, Additional Commissioner, Deputy Commissioner, Assistant

Commissioner/Taxation Officers.

CHIEF COLLECTORS

South Region
Karachi, Hyderabad, Quetta and Gwadar

North Region
Lahore, Rawalpindi, Peshawar, Multan, Faisalabad, Sambrial

The most important wing of the FBR is Inland Revenue wing.

Inland Revenue (FBR)

The Inland Revenue wing is the most important wing of the FBR and is responsible to collect
and manage domestic taxes. The three Domestic Taxes (Income Tax, Sales Tax and Federal
Excise Duty), constitute about 90% of the Revenue collected by FBR. These taxes are not only
similar in essence, but also are interdependent in practice. To improve the tax to GDP ratio, the
Inland Revenue Wing of the FBR was created, combining the three domestic taxes.

The organizational structure of the Inland Revenue Wing at the FBR Headquarter and their job
assignments are as under:

Chiefs – Inland Revenue (IR) Wing

1. Chief IR (Headquarter)
2. Chief (Sales Tax/Federal Excise Duty – Policy)
3. Chief (Income Tax – Policy)
4. Chief IR (Operations)
5. Chief IR (Audit)
6. Chief IR (Automation)
1. Chief IR (Headquarter)
The following sections would work under Chief IR (Headquarter):

I.R – General:
– Matters pertaining to rewards for detection of tax evasion
– Matters pertaining to PRAL
– Matters pertaining to reforms/ restructuring/ re-organization
– Any other job assign

I.R – Judicial Section:

– ADR matters – Income Tax/ Sales Tax
– FTO maters – Income tax / Sales Tax
– Legal matters, Appeals and Court Cases
– Parliament business
– Cabinet matters
– Any other job assigned

I.R – Coordination Section:

– Coordination on Income Tax and Sales Tax matters, including:-
– Taxpayers Registration for Income Tax and Sales Tax
– Board in Council
– Conferences
– Any other job assigned

I.R – Revenue Budget:

– Assignment and monitoring of collection targets of Income Tax, Sales Tax and Federal Excise
Duty.
– Matters pertaining to I.Tax/ S.Tax/ FED Jurisdiction.
– Matters pertaining to Income Tax/ Sales Tax refunds.
– Authorization of banks for collection of revenue.
– Any other job assigned.

2. Chief (Sales Tax/Federal Excise Duty – Policy)

Secretary (Sales Tax and Federal Excise Duty Budget) would work under him. His assignment
would include:
– All budget and policy matters relating to dutiable / taxable goods and services
– Post budget clarifications and SROs
– ST and FE law and procedure and interpretation thereof
– Issuance of SROs/General Orders/ Circulars/Clarifications etc.
– Clarifications of goods and services
– Valuation of goods and tariff values
– Any other job assigned

3. Chief (Income Tax – Policy)

The following sections would work under Chief IR (Income Tax Policy):-
Secretary (ITP):
– All Matters pertaining to income tax policy
– Clarifications on income tax policy

Secretary (WHT):
– All matters pertaining to withholding taxes

Secretary (Exemptions)/(I.T Rules):

– All matters pertaining to Income Tax exemptions/Second Schedule and Income Tax Rules
– All matters pertaining to sales tax exemption

Secretary (International Taxes):

– All matters pertaining to international taxes
– Income Tax and Sales Tax
– Coordination / liaison with BOI, IMF, WB, IFC, DFID, OECD (including training) etc.
– Matters relating to international tax agreements/treaties.

In order to rationalize the work flow, compliance, enforcement, monitoring and recovery of taxes
ensuring facilitation for the taxpayers in their respective areas of responsibilities an equal
number of RTOs/LTUs i.e. seven (07) offices (mentioned below) are placed under each Chief
(Inland Revenue) of FBR. Each Chief (IR) would be assisted by Secretary and Second Secretary,
and would have the following jurisdiction:

CHIEF IR-I CHIEF IR-II CHIEF IR-III

LTU, Islamabad LTU, Lahore LTU, Karachi

RTO, Islamabad RTO, Lahore RTO, Karachi

RTO, Rawalpindi RTO-II, Lahore RTO-II, Karachi

RTO, Peshawar RTO, Sialkot RTO-III, Karachi

RTO, Abbotabad RTO Gujranwala RTO, Hyderabad

RTO, Faisalabad RTO, Multan RTO, Sukkur

CHIEF IR-I CHIEF IR-II CHIEF IR-III

RTO, Sargodha RTO, Bahawalpur RTO, Quetta

 Matters pertaining to complaints of tax evasion and taxpayer’s grievance will be dealt by Chiefs, I, II
and III for their respective jurisdiction.
 Matters pertaining to PAC / DAC and external audit will be dealt by Chief IR.I.
 Monitoring of daily collections, refunds and filing of returns will be monitored by Chief IR, I, II, III
for their respective jurisdictions.
 Automation and e-filling will be handled by Chief IR-III.

1. The Central Board of Revenue became Federal Board of Revenue by the enactment of
(A) FBR Act 2006
(B) FBR Act 2007
(C) FBR Act 2008
(D) FBR Act 2009

2. The current chairman of FBR is

(A) Qamar Zaman Chaudhry
(B) Absar Alam
(C) Nisar Muhammad Khan
(D) Usman Yousaf Mobeen

3. The Chairman FBR is

I. Executive head of the Board
II. Secretary of the Revenue Division
III. Chief Commissioner Inland Revenue
(A) I only
(B) II only
(C) I and II
(D) I, II and III

4. To provide convenience to the Large Taxpayers, the posts of Chief Commissioner Inland
Revenue Large Taxpayers Unit (LTUs) were established in
(A) Islamabad, Lahore and Karachi
(B) Islamabad, Karachi and Peshawar
(C) Islamabad, Lahore, Karachi, Peshawar and Quetta
(D) Islamabad, Lahore, Karachi, Peshawar, Quetta and Muzaffarabad
5. The Chief Collectors Southern region include Chief Collectors:
(A) Karachi, Lahore and Hyderabad
(B) Karachi, Hyderabad and Quetta
(C) Lahore, Rawalpindi and Peshawar
(D) Karachi, Hyderabad, Quetta and Gwadar

6. The Chief Collectors Northern region include Chief Collectors:

(A) Lahore, Rawalpindi and Peshawar
(B) Lahore, Rawalpindi, Peshawar and Multan
(C) Lahore, Rawalpindi, Peshawar, Multan and Faisalabad
(D) Lahore, Rawalpindi, Peshawar, Multan, Faisalabad and Sambrial

7. Which from the following are the responsibilities of FBR chairman?

I. Formulation and administration of fiscal policies
II. Levy and collection of federal taxes
III. All matter relating to administrative control
(A) I and II
(B) I and III
(C) II and III
(D) I, II and III

8. Which from the following are called domestic taxes?

(A) Income Tax
(B) Sales Tax
(C) Federal Excise Duty
(D) All of the above

9. The Inland Revenue Wing of the FBR is responsible to collect

(A) Income Tax
(B) Sales Tax
(C) Federal Excise Duty
(D) All of the above taxes

10. Domestic Taxes constitute about __________ of the Revenue collected by FBR.
(A) 80%
(B) 85%
(C) 90%
(D) 95%

ANSWERS: FEDERAL BOARD OF REVENUE (FBR) MCQS

1(B) 2(C) 3(C) 4(A) 5(D)
6(D) 7(A) 8(D) 9(D) 10(C)
11. Which from the following is the direct responsibility of chairman FBR?
(A) All matter relating to administrative control
(B) All legal issues pertaining to the jurisdiction
(C) Quasi-judicial function of hearing of appeals
(D) Generation of revenue within jurisdiction

12. Which from the following is NOT the responsibility of Chief Commissioners LTUs?
(A) Enforcement/collection of revenue
(B) Facilitation of Taxpayer
(C) Generation of revenue within jurisdiction
(D) Interaction with the concerned ministries

13. Which from the following is the responsibility of Chief Commissioners LTUs?
(A) All matter relating to administrative control
(B) Generation of revenue within jurisdiction
(C) All legal issues pertaining to the jurisdiction
(D) All of the above

14. The total number of Inland Revenue Wings chiefs at the FBR Headquarter is
(A) 3
(B) 4
(C) 5
(D) 6

15. Which from the following sections work under Chief Inland Revenue (IR) Headquarter?
(A) IR General and IR Judicial section
(B) IR General, IR Judicial section and IR coordination section
(C) IR General, IR Judicial section, IR coordination section and IR Revenue Budget
(D) IR General, IR Judicial section, IR coordination section, IR Revenue Budget and IR ST/FED
section

16. Valuation of goods and tariff values is the responsibility of

(A) Chief IR (HQs)
(B) Chief (ST/FED – Policy)
(C) Chief (Income Tax – Policy)
(D) Chief IR (Operations)

17. Post budget clarifications and issuance of SROs is the responsibility of

(A) Chief IR (HQs)
(B) Chief (ST/FED – Policy)
(C) Chief (Income Tax – Policy)
(D) Chief IR (Operations)

18. Taxpayers Registration for Income Tax and Sales Tax is the responsibility of Inland Revenue
(A) General Section
(B) Judicial Section
(C) Coordination Section
(D) Revenue Budget Section

19. Assignment and monitoring of collection targets of Income Tax, Sales Tax and Federal
Excise duty is the responsibility of IR
(A) General Section
(B) Judicial Section
(C) Coordination Section
(D) Revenue Budget Section

20. Matters pertaining to Income Tax, Sales Tax and Federal Excise duty Jurisdiction is the
responsibility of IR
(A) General Section
(B) Judicial Section
(C) Coordination Section
(D) Revenue Budget Section

ANSWERS: FUNCTIONS OF FBR MCQS

11(C) 12(D) 13(D) 14(D) 15(C)
16(B) 17(B) 18(C) 19(D) 20(D)

21. All budget and policy matters relating to dutiable / taxable goods and services is the
responsibility of
(A) Chief IR (HQs)
(B) Chief (ST/FED – Policy)
(C) Chief (Income Tax – Policy)
(D) Chief IR (Operations)

22. The each chief of the three Chiefs Inland Revenue (IR) is assisted by Secretary and Second
Secretary and _____ RTOs/LTUs offices.
(A) 5
(B) 6
(C) 7
(D) 8

23. Which from the following sections work under the Chief (Income Tax – Policy)?
(A) Secretary (ITP) and Secretary (WHT)
(B) Secretary (ITP) , Secretary (WHT) and Secretary (Exemptions)/(I.T Rules)
(C) Secretary (ITP) , Secretary (WHT) and Secretary (International Taxes)
(D) Secretary (ITP) , Secretary (WHT), Secretary (Exemptions)/(I.T Rules) and Secretary
(International Taxes)

24. Matters pertaining to reforms/ restructuring/ reorganization is the responsibility of IR

(A) General Section
(B) Judicial Section
(C) Coordination Section
(D) Revenue Budget Section

25. Matters related to parliament business, cabinet matters and ADR, FTO matters (Income Tax/
Sales Tax) is the responsibility of IR
(A) General Section
(B) Judicial Section
(C) Coordination Section
(D) Revenue Budget Section

26. A tax that takes a larger percentage from high-income earners than it does from low-income
earners is called
(A) proportional tax
(B) progressive tax
(C) regressive tax
(D) suppressive tax

27. Which from the following is NOT an indirect type of tax?

(A) Income Tax
(B) Sales Tax
(C) Custom Tax
(D) Federal Excise Duty

28. The sales tax paid at any stage does not exceed _____ of the total sales price of the supplies.
(A) 15%
(B) 16%
(C) 17%
(D) 18%

29. Income tax is levied generally on the

(A) net income
(B) gross income
(C) gross income − net income
(D) any from the above

30. Capital Value Tax is levied on transaction of

(A) movable property
(B) immoveable property
(C) perishable property
(D) damaged goods

ANSWERS: INLAND REVENUE MCQS

21(B) 22(C) 23(D) 24(A) 25(B)
26(B) 27(A) 28(C) 29(A) 30(B)
31. Which from the following is NOT among the heads of “Total Income”?
(A) Salary
(B) Income from property/business
(C) Income from sales
(D) Capital gains

32. Custom duty is levied on goods

I. imported into Pakistan
II. exported from Pakistan
III. transported through Pakistan
(A) I only
(B) II only
(C) I and II
(D) I and III

33. Excise duties are levied on a limited number of goods manufactured, and services provided
_____ Pakistan.
(A) in
(B) outside
(C) both A and B
(D) None of these

34. All exports are liable to _____ Federal Excise Duty.

(A) 0%
(B) 5%
(C) 10%
(D) 17%

35. Which from the following is/are considered as “Good(s)”?

(A) Actionable claims
(B) Money
(C) Stocks, Shares and Securities
(D) None of these

36. Which Section of the Sales Tax Act 1990 stipulates the goods that are exempt from levy of
sales tax?
(A) Section 4
(B) Section 10
(C) Section 13
(D) Section 15

37. Which Schedule of Section 13 of the Sales Tax Act 1990 includes a list of items on which no
sales tax is levied?
(A) Third Schedule
(B) Fourth Schedule
(C) Fifth Schedule
(D) Sixth Schedule

38. Sales Tax is levied at the rate of _____ on all goods imported into Pakistan.
(A) 0%
(B) 5%
(C) 10%
(D) 17%

39. The sales tax on goods imported into Pakistan is paid by the
(A) importers
(B) exporters
(C) both A and B
(D) None of these

40. All supplies made in Pakistan by a registered person in the course of any business carried on
by him, is liable to pay __________ sales tax.
(A) 0%
(B) 5%
(C) 10%
(D) 17%

ANSWERS: TAXATION QUIZ

31(C) 32(C) 33(A) 34(A) 35(D)
36(C) 37(D) 38(D) 39(A) 40(D)

41. Taxable supply means a supply of taxable goods. The supply of taxable goods does not
include taxable supply made by a/an
(A) importer
(B) transporter
(C) retailer
(D) manufacturer

42. Which from the following transactions do not constitute taxable supply?
(A) Supply of exempt goods
(B) Supply of goods chargeable to tax at the rate of zero per cent
(C) Supply made by an importer
(D) Supply made by a banker

43. Zero-rated supply means a taxable supply which is charged to tax at the rate of 0% . Which
Section of the Sales Tax Act 1990 elucidates the goods that are chargeable to tax at the rate of 0
percent?
(A) Section 4
(B) Section 10
(C) Section 13
(D) Section 17

44. Which Schedule of Section 4 of the Sales Tax Act 1990 includes a list of items on which 0%
sales tax is levied?
(A) Third Schedule
(B) Fourth Schedule
(C) Fifth Schedule
(D) Sixth Schedule

45. Under which section of the Sales Tax Act 1990, the Federal Government is empowered to
prescribe any specified taxable goods which can be imported without payment of whole or part
of sales tax?
(A) Section 30
(B) Section 40
(C) Section 50
(D) Section 60

46. Retailer means a person supplying goods to __________ for the purpose of consumption.
(A) departmental stores
(B) general public
(C) wholesaler
(D) shops

47. Which from the following taxes is not included in the Retail Price?
(A) Sales tax
(B) Excise duty
(C) Utilities
(D) Capital value tax

48. Registered Person means a person who is:

I. Registered
II. Liable to be registered
III. Tax avoider or Tax escaper
(A) I only
(B) II only
(C) I and II
(D) I, II and III

49. Which from the following activity is not considered as a taxable activity?
(A) An economic activity carried on for profit
(B) An economic activity carried on not for profit
(C) Rendering services
(D) Employee work and services
50. Value of supply is equal to
(A) Taxable Supply
(B) Taxable supply + All Taxes
(C) Taxable Supply + All taxes + Duty Paid
(D) Taxable Supply + All taxes − Duty Paid

ANSWERS: TAXATION QUIZZES

41(B) 42(D) 43(A) 44(C) 45(D)
46(B) 47(A) 48(C) 49(D) 50(C)

51. In general, according to Sales Tax Act 1990, tax period is a period of
(A) one month
(B) six months
(C) nine months
(D) one year

52. The due date to furnish a return at the end of the tax period is the _____ day of the following
month.
(A) 7th
(B) 10th
(C) 15th
(D) 18th

53. A computerized program for analysing and cross-matching of sales tax returns is called
(A) Matlab
(B) SPSS
(C) SAS
(D) CREST

54. Cottage industry means a manufacturer whose annual turnover from taxable supplies made in
any tax period during the last twelve months ending any tax period does not exceed
(A) Rs. 1.00 million
(B) Rs. 5.00 million
(C) Rs. 10.0 million
(D) Rs. 100 million

55. Local supplies of goods made by a cottage industry are exempt from
(A) Income Tax
(B) Sales Tax
(C) Capital Value Tax
(D) Federal Excise Duty

56. General Sales Tax (GST) is charged on

(A) Selling Price
(B) Retail Price
(C) Manufacturing Cost
(D) None of these

57. Selling Price is equal to

(A) Retail Price + GST
(B) Retail Price − GST
(C) Manufacturing Cost + GST
(D) Manufacturing Cost − GST

58. According to Income Tax Ordinance 2001, the Normal tax year is a period of twelve months
from _____ to _____.
(A) 1 January, 31 December
(B) 1 April, 30 March
(C) 1 July, 30 June
(D) 1 September, 31 August

59. The income of a resident person is computed by taking into account amounts that are:
I. Pakistan-source income
II. Foreign-source income
(A) I only
(B) II only
(C) I + II
(D) I − II

60. The income of a non-resident person is computed by taking into account amounts that are:
I. Pakistan-source income
II. Foreign-source income
(A) I only
(B) II only
(C) I + II
(D) I − II

ANSWERS: TAXATION MCQS

51(A) 52(C) 53(D) 54(C) 55(B)
56(B) 57(A) 58(C) 59(C) 60(A)