The Large Taxpayer Unit (LTU), Karachi, has expressed serious concern over the filing of sales tax and federal excise returns through web-portal creating panic and confusion among the top multinational companies, corporate entities and documented business establishments.
Sources told Business Recorder on Tuesday the LTU Karachi has requested the Federal Board of Revenue (FBR) to forthwith amend the Standing Operating Procedure (SOP) issued for the filing of sales tax returns to abolish condition of mandatory filing through web-portal. Despite filing of returns electronically, the system error in the e-filing has directed the compliant taxpayers that sales tax returns were not received.
The board had claimed that web-portal was more simplified and user-friendly. However, the LTU Karachi tells an entirely different story where the system has created serious problems for the large taxpayers.
Out of 560 LTU taxpayers, 472 have been registered with the LTU, Karachi e-filing project. The remaining taxpayers are in the pipeline for registration and verification. Apparently, the encouraged compliance rate is 85 percent in the first month of the e-filing project.
Similarly, 213 sales tax returns were filed for August 2007, out of 355 registered filers, reflecting 60 percent compliance rate. However, Sales Tax Wing had issued an SOP on August 28, 2007 advising taxpayers for e-filing of sales tax returns on e-CBR portal which has created a lot of confusion and panic among LTU Karachi taxpayers. At the same time, the system of e-CBR has also generated e-mail to all LTU Karachi sales tax filers with the message of non-compliance of e-filing of sales tax returns.
The LTU Karachi has requested the Member, Sales Tax to amend the SOP for accommodating registered units of LTU Karachi in accordance with the directions of the FBR chairman that the LTU taxpayers shall file returns and statements of all the federal taxes with the system of the Banxis (Pvt) Ltd.
The LTU Karachi stated that the response of the taxpayers for e-filing of annual income tax withholding statements for the year 2007 is also motivating. Taxpayers have filed 118 salary annual statements and 93 other statements despite the fact that the due date for e-filing has been extended till September 30.
A total of 69 monthly statements have been filed electronically by the large taxpaying units in August 2007 against 560 registered units, reflecting slow e-filing of monthly statements.
Sources said the reason for lesser response is due to the fact that the system rejects the incorrect/non-available National Tax Number (NTN) and Computerised National Identity Card (CNIC) number of employees as well as vendors. The emphasis on the compulsory NTN/CNIC of the payees/vendors/employees was in view of the documentation of economy under the policy decision taken by FBR effective from July 2007.
The system has inbuilt mechanism, which gives alert to the taxpayers and also provides a mechanism to correct the entry of vendors/employees by putting their correct NTC/CNIC numbers.
The LTU Karachi is ready to receive returns of income due on September 30, 2007 with the facility to the e-intermediaries to file returns of all their clients in one go, sources added.
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