Audit, return filing by businesspeople: FBR to give relaxation on integration with new systems

ISLAMABAD: The Federal Board of Revenue (FBR) will give relaxation from return/statement filing and audit to withholding agents, manufacturers, dealers, distributors, wholesalers and retailers, who would integrate with the FBR’s new systems.

Sources told Business Recorder here on Saturday that the Directorate-General for Digital Invoicing and Analysis and Synchronized Withholding Agents System would integrate the sales tax supply chain and withholding agents, respectively. The FBR will give incentives to the withholding agents as well as the entire supply chain who would online report their sales and withholding data under the FBR’s new system.

Under the proposed Synchronized Withholding Agents Program (SWAP), the withholding agents would be given various incentives who would synchronize with the FBR and online report their data with the SWAP. Whether the withholding agent is a government department, or body or a private company, similar kinds of incentives would be extended to all kinds of withholding agents. The department/company which would do withholding, the same data would be online report to the FBR’s proposed system of SWAP. These included government departments, engineering departments, registrar of properties, registering, recording or attesting transfer of any immovable property, motor vehicles registration authorities, the AGPR and private sector companies, and other categories of withholding agents.

FBR willing to consider ‘slashing’ audit period by half

The withholding agents integrated with the SWAP may not be required to file the quarterly withholding tax statement. At the same time, the said category of withholding agents would not be subjected to audit.

As the FBR would be able to get online data of withholding from the agents, it would not be necessary to conduct an audit of these agents.

The system will link the sales data of manufacturers, dealers, distributors, wholesalers, and retailers with the FBR’s system. The monthly sales tax information including payments of sales tax would be available to the FBR under the new system. Due to the online availability of data, the evasion of sales tax would not be possible.

The FBR is expected to waive the major condition of monthly filing of sales tax returns and audits for those manufacturers, dealers, distributors, and retailers, who would be linked with the system of the DG Digital Invoicing and Analysis.

In the presence of the availability of online data, the FBR will give concessions to the entire supply chain due to the submission of electronic information on a monthly basis. The FBR’s system would itself generate monthly sales tax returns of the said categories of the supply chain, who would be integrated with the Directorate General for Digital Invoicing and Analysis.

The exemption from the audit is also under consideration of the FBR for the manufacturers, dealers, distributors, wholesalers and retailers, who would be linked with the FBR’s system of digital invoicing.

These are very big incentives for the manufacturers, dealers, distributors, wholesalers, and retailers, who would be integrated with the FBR’s new system to be launched.

The point of sale system of the FBR would also come under the Directorate General for Digital Invoicing and Analysis. The data of these taxpayers are regularly entered into the FBR’s system and there would be no need for submission of monthly sales tax returns or audits.

Recently, the FBR transferred Asem Iftikhar, a BS-20 officer of the Inland Revenue Service (IRS) to the post of director-general, Directorate General of Digital Invoicing and Analysis.

A new Directorate-General for Digital Invoicing and Analysis has been provided in the Finance Act, 2021.

Under the new provision, the Directorate General of Digital Invoicing and Analysis shall consist of director-general and as many directors, additional directors, deputy directors, and assistant directors and such other officers as the Board may, by notification in the official gazette, appoint.

Copyright Business Recorder, 2022