Automated system for sales tax registration to be effective from July 1: FBR
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The Federal Board of Revenue (FBR) on Monday announced that an automated system for sales tax registration will be effective starting July 1.
A press release issued by the FBR stated that the procedure has been proposed to replace the existing system under sub-rules (2) to (8) of Rule 5 of the Sales Tax Act, 1990.
An applicant with a National Tax Number (NTN) or income tax registration will be able to login to the online system and upload the following information and documents for sales tax registration:
- Bank account certificate issued by bank in the name of the business
- Registration/consumer number with the gas and electricity supplier
- Particulars of all branches in case of multiple branches at various locations
- GPS-tagged photographs of the business premises
- In case of a manufacturer, GPS-tagged photographs of machinery and industrial electricity or gas meter installed
Upon furnishing the above documents, the system will register the applicant for sales tax, the FBR press release said.
After registration, the applicant or an authorised person will need to visit a National Database and Registration Authority (Nadra) e-Sahulat Centre within a month for biometric verification.
In case of failure to visit or failure to complete biometric verification, the registered person’s name shall be taken off the Active Taxpayer List for sales tax.
In case of a manufacturer, the FBR may require post verification through field offices or a third party authorised by the FBR, the statement said.
In case the field office, during post-registration scrutiny, finds that any document provided is not genuine/fake/wrong, it may issue a request through the system to provide the missing document within 15 days, failing which the registered person shall be removed from the sale tax Active Taxpayer List.
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Comments (16) Closed
Jun 24, 2019 10:07pm
A very commendable action of the Government. Previously Industrialist were discouraged by FBR not to register under Sales Tax and continue business by paying them bribe.
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Jun 24, 2019 10:36pm
It is wrong to say that Pakistanis are not paying taxes. Due to the lack confidence of people in the system, the people are not formally registered as taxpayers, however, they are automatically in the tax net spread over by the Government in variety of ways and not a single item or services is spared from tax. These indirect taxes generate revenue, which is misappropriated by the Govt. authorities, which result in shortfall of budget, and the Govt. has to depend on foreign loans. The best way is to restore confidence of the general public in the tax system and make it easy and favorable, so that the people should participate in it voluntarily, otherwise, all schemes will result in failure. The first step is to reduce the burden of indirect taxes and make the things of daily use within the approach of common man, and then create a conducive atmosphere for volunteer payment of taxes with pride by common Pakistanis.
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Jun 24, 2019 10:44pm
A good move by FBR under the control of newly appointed FBR Chairman Mr.Shabbar Zaidi. Before it was impossible to get Sales Tax Registration unless you are prepared to spend 50K to 100K under the table although your case is legimate and genuine. Similarly if anyone wants to get deregistraton even more amount is required for concerned FBR officials
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Jun 24, 2019 10:59pm
Overseas Pakistanis are subject to taxes and pay with happy faces. This makes country’s economy to grow and we all drum our quality & comfortable living, because we can see our taxed dollar is at work and visible. Why we are crying within our beloved country who gave us identification across the borders to flourish. It is a positive step for Pakistan to develop and we should rather support it. I would echo government’s plans, evasion of taxes is crime and nations those do not pay taxes would always keep bagger bowl and live on the mercy of donors with no respect.
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Jun 24, 2019 11:02pm
Good, tax payers must be respected and protected, they are the person's contributing to economy / creating jobs.
Harrassment of business man is non productive and it will encourage bribe to tax officer's.
Take care business man, they take your country,
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Jun 24, 2019 11:08pm
Why do we always have to find the answers to bad administration in any department as more automation and technology? Technology is only as honest and efficient as it's operators and users. Corrupt officials will always adapt to automation. Look at land record system....
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Jun 25, 2019 12:07am
@A Canadian tax payer, Problem is is current taxes are beyond the means of income compare to world wide and we have highest indirect taxes in the region, now after such hardship of life they want to take more and more from us while got no cut in their own expenditure and you still expect people to pay, so no one is fool to do so.
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Jun 25, 2019 12:16am
@Jalbani Baloch, You are correct in terms of sales tax but income tax needs to be pushed to generate from companies
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Jun 25, 2019 05:21am
In Pakistan many businesses do not pay taxes.
There are lots of businesses that look small from outside but make huge profits.
These businesses have never paid a single cent in taxes but the owners have got rich and love in
Clifton in the best local in Karachi.
If most of businesses don’t pay taxes , how can the government function?
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Jun 25, 2019 06:06am
@A Canadian tax payer,
Thanks for valuable article with facts. We were not used to pay and eat 100% then non-tax payers creating hurdles to become scapegoat. Finally it is got to be paid or taken by Govt. with valid means. Best to Imran and his government.
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Jun 25, 2019 06:26am
@Riaz Hussain, Absolutely. Regarding de- registration, it should be done online on application. And it should be easy.
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Jun 25, 2019 06:31am
@Dr Misbah London , Make being honest easy for the people. Its hard to pay taxes if you want to pay. You have to pay bribe just to complete tax papers. This step may encourage many to pay their dues. The cheats has to be caught and punished. Without that no system can work.
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Jun 25, 2019 07:34am
And what makes the government thinks they will register and give up making free money?
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Jun 25, 2019 08:08am
@Dr Misbah London , well, a yes and no to your notion.
Yes, it is not the complete solution but it acts as a tool of transparency.Once these tools are on the shelf, the doors for corruption will be closed or at least be identifiable. Further, as ppl would have access to info, they would be well aware of any dubious happenings on their account.
Automation is one step towards transparency.It is just like if you ask me (your domestic servants e.g.) about details of groceries done by me for household for a month,and that too in bits and pieces like 2 items bought today,and next two after 3 days,it would be tough for me to remember,but if I have some mechanism by which every time I make a purchase it is recorded,I can provide you exact no. items purchased,the qty purchased, the amount spent on each purchase,suddenly you have more control on justifying the expense n I cant get away pinching money from your pocket without your knowing. Whether you wanna penalize me or not is ur decision.
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Jun 25, 2019 08:33am
Am I supposed to charge 8% services tax plus 17% sales tax on invoices to my clients? That's 25% tax which is being added to the service industry. For non service industry its 21.5%. Absolutely nonsensical.
More businesses & people will start dealing in cash to avoid this.
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Jun 25, 2019 06:32pm
After reading the details about the planned system, all I can say is that it is merely a farce to attract more businesses to come into the trap. If the desire is to get the economy documented without any hurdles, few steps are necessary to implement prior to inviting registration process. First and foremost is there must be no contact with the government officials and its lower staff with the businesses. Secondly, but more importantly, the sales tax paid should be made non-refundable at different stages with a drastic cut in the rates to even as low as three percent only. Consider the total amounts to be earned without any hassle or payments of bribery and creating worries to the businesses and imagine the willingness of every business to get registered and you have your answers.
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