Mohsin Siddiqui (Chief Reporter)
The Federal Board of Revenue (FBR) has announced a relaxation in the filing requirements for balance sheets of assets and liabilities for individuals, Association of Persons (AoPs), and single member companies already registered with the sales tax department. This move aims to alleviate the burden on existing registrants and streamline the tax filing process.
Arshad Shehzad, a renowned sales tax expert based in Karachi, highlighted that the FBR recently implemented stringent conditions for new sales tax registrations. These conditions, introduced through amendments in the sales tax registration rules of 2006, aimed to curb tax fraud by imposing stricter regulations on various activities and transactions.
The amendments were prompted by the discovery of significant tax fraud involving the issuance of fake invoices to evade electronic system checks. To address these loopholes, the FBR introduced new conditions, including mandatory balance sheet filing for fresh registrations and certain classes of already registered individuals and entities.
However, many registered persons were unaware of this requirement, leading to confusion and disruption in the tax filing process after Eid Holidays. Following representations from tax bars, trade bodies, and business forums, the FBR has partially relaxed the condition and lifted the electronic filing check, providing relief to genuine businesses.
Arshad Shehzad emphasized the need for the FBR to strike a balance between tax compliance and simplification. He suggested that unnecessary compliances and limitations should be avoided to foster a more taxpayer-friendly environment. With existing legal provisions enabling the FBR to access necessary information, Shehzad questioned the need for additional electronic barriers in the filing process.
Despite the relaxation of certain conditions, Shehzad reiterated the importance of maintaining a fair balance to prevent overburdening businesses and hindering tax compliance efforts. He emphasized the significance of creating a conducive environment for taxpayers while effectively combating tax fraud through targeted measures.
