ISLAMABAD: On the recommendations of the Federal Tax Ombudsman (FTO), the Federal Board of Revenue (FBR) will raise a comprehensive infrastructure, based on automated environment, through which all retailers, liable for Sales Tax registration are brought under tax net without discrimination.

The FTO officials informed media on Tuesday at the FTO office that the Comprehensive Automated Infrastructure for End-to-End Integration would ensure taxpayer-friendly automated regulatory regime through a level playing environment and without creating discrimination is critical for effective success of the regulatory regime.

It is observed that, the FBR needs to raise a comprehensive infrastructure, based on automated environment, through which all persons, liable to be Sales Tax registration are brought under the tax net without discrimination/ without exemption brackets.

The FBR should upgrade the system, remove capacity limitations, and streamline the systemic support for revision of returns and adjustment of extra sales tax period, allowing identification of individual invoices in the Integrated Tax Management System (ITMS).

The expansion of the tax base in Pakistan is recognised as an essential policy goal to increase domestic sources to reduce foreign aid dependence. However, the integration of businesses with the POS is a big challenge for both the FBR and businesses alike for multiple reasons.

Expert for enforcing tax writ firmly

First is the complexity of legal provisions for the POS integration. Second are glitches and delays in the automated system of the FBR.

Overall, the integration process is fraught with procedural delays and systemic limitations.

It is yet to be analysed whether the scheme has made a sizeable contribution to raising the revenue and how successful is the process of monitoring the taxable activities through point of sale integration. It is recommended that while carrying on with the aim of more integration, the FBR should ensure a taxpayer-friendly Automated System removing the flaws pointed out in the study, and doing away with the discretion by more and speedy automation systemic improvement, officials added.

Copyright Business Recorder, 2022