FBR Introduces Stricter Tax Measures to Boost Revenue

The government is introducing new measures to improve tax collection processes, with a target of raising Rs70 billion in the upcoming fiscal year. These measures aim to streamline tax procedures and combat tax evasion effectively.

Under the proposed changes, the Sales Tax Act may grant special powers to seal shops that issue three non-certified electronic receipts in a day. The Federal Board of Revenue (FBR) chairman presented these proposals to the Senate Standing Committee on Finance and Revenue, chaired by Senator Saleem Mandviwalla.

One significant recommendation is that shops should accept debit and credit cards to discourage cash transactions, promoting transparency in financial dealings. The committee also discussed the possibility of imposing a 10% sales tax on stationery and books, which might be reconsidered to exempt the stationery sector from taxes instead of zero-rating.

To strengthen monitoring and legal systems, the government plans to crack down on tax fraud by enforcing strict regulations. Non-compliance, such as failing to issue Point of Sale (POS) verified invoices or lacking a functioning POS system, could lead to shop closures. The FBR aims to digitize its system and integrate business supply chains for better tax administration.

Penalties for non-compliance with POS requirements include a fine of Rs500,000, emphasizing the importance of adhering to tax regulations. The FBR will monitor POS machines through an integrated licensing system to ensure compliance. Retailers are urged to accept credit cards, with strict enforcement measures in place.

These proposed tax measures are designed to enhance tax collection efficiency and combat tax evasion effectively. The government's focus on tightening regulations and promoting transparency in financial transactions is crucial for a fair tax system. By implementing these measures, the government aims to streamline tax processes and ensure compliance for a more robust economy.