Filing of ST returns by federal/provincial departments: FBR has to seek political backing of the government

The Federal Board of Revenue (FBR) has to seek political backing of the government to enforce timely filing of sales tax returns by government departments and organisations to improve their compliance within the jurisdiction of federal/provincial governments.
Sources told Business Recorder here on Monday that one of the key enforcement measures is to enforce regular filing of sales tax returns by the government departments and companies. The government departments have to file sales tax returns in time and submit the details of tax withheld on regular basis. The FBR seemed to be unable to convince the government organisations to file their sales tax returns. However, the FBR expressed its inability to enforce the documentation measure and said, "The issue has to be dealt with at political level," FBR said.
This has also been mentioned in the FBR action plan under the Tax Administration Reform Project (TARP). "This issue has to be dealt with at a political level. Without these entities information it will not be possible to control the use of credit for taxes withheld", the report said. According to sources, all regional tax offices (RTOs) have been directed to enforce sales tax returns under the Sales Tax Act 1990 required from the government departments besides recovering the amount of tax. The compliance at the level of the field formations has been monitored by FBR Members Domestic Operations North and South.
When contacted, a tax expert said that some government departments are reluctant to provide sales tax information about their suppliers including dealers etc, who could be potential taxpayers. These government departments are not providing information about the details of their suppliers from whom sales tax has been withheld on supplies made to the autonomous organisations and government departments/organisations.
It is mandatory for all government departments to deduct one fifth of the sales tax involved on supplies made to these organisations. However, it has been observed that the certain government departments do not provide details about persons of whom they have withheld the sales tax under the Sales Tax Special Procedure (Withholding) Rules, 2007. Resultantly, the FBR could not maintain the data of suppliers, etc, of government departments which is necessary for obtaining accurate information about the business transactions made by them, he added.