KARACHI: Taxpayers are facing difficulties in e-filing sales tax returns after new amendments to the Sales Tax Rules of 2006 to address the risk of sales tax fraud.

According to the details, the key changes include mandatory submission of business capital details for new and existing importers, exporters, retailers, wholesalers, and distributors, annual biometric re-verification for all registered individuals, and the reinstated pre-verification requirement for fresh sales tax registrations.

While these measures aim to strengthen the FBR’s controls and prevent fraudulent invoice usage, they have created hurdles for taxpayers in meeting their compliance obligations.

Business class taxpayers: FBR may make balance sheets mandatory

Speaking to Business Recorder, Munawar Manekia, an advocate and tax consultant, highlighted the challenges faced by taxpayers. He explained that under the new rules, sales tax returns are not accepted until the suppliers of the taxpayers have filed their respective returns.

Furthermore, after the due date, taxpayers have to pay recomputed sales tax after deleting purchase invoices and input tax to validate their returns, making the process more cumbersome.

Manekia criticised the FBR for not taking stakeholders into confidence before introducing the changes. He noted that the new amendments require suppliers to submit sales tax returns first, followed by wholesalers having to provide their balance sheets for approval by the Commissioner before taxpayers can finally file their returns.

This sequential process, Manekia warned, raises the risk of reducing the overall number of tax filers. He appealed to the FBR Chairman to review the matter and take remedial measures to ensure maximum facilitation for taxpayers.

The FBR’s drive to enhance tax compliance and curb evasion is understandable, but the implementation challenges highlighted by tax experts suggest the need for a more collaborative approach with the business community.

Copyright Business Recorder, 2024