Mohsin Siddiqui (Chief Reporter)
The Federal Board of Revenue (FBR) has taken decisive steps to curb sales tax fraud by imposing restrictions on various activities and transactions of sales taxpayers. On Friday, crucial amendments were introduced to the Sales Tax Rules of 2006, aimed at mitigating the risks associated with tax fraud.
A prominent sales tax expert based in Karachi highlighted the issuance of a significant notification by the FBR, which carries significant compliance implications for the business community.
Recently, the FBR uncovered a substantial tax fraud involving the issuance of fake invoices by unscrupulous individuals to exploit loopholes in the electronic system’s checks and balances. To address these identified loopholes, the law has been updated with more stringent conditions through these amendments.
Key amendments include:
- Declaration of Business Capital: New registrations for importers, commercial exporters, Tier-1 retailers, wholesalers, and distributors must submit a balance sheet showing business capital and corresponding bank assets within 30 days. Failure to comply will necessitate permission to file sales tax returns through IRIS.
- Periodic Biometric Verification: All registered individuals must undergo biometric re-verification annually at Nadra e-Sahulat Centres during July. Non-compliance will result in the inability to file tax returns without permission from the concerned commissioner.
- Re-Introduction of Pre-Verification for ST Registration: Pre-verification requirements before registration have been reinstated. Fresh sales tax registrations are now subject to pre-certification.
These measures underscore the FBR’s commitment to enhancing tax compliance and combating fraudulent activities in the sales tax domain.
