FBR Waives Affidavit Requirement for September 2024 Sales Tax Returns

The Federal Board of Revenue (FBR) has recently made a significant decision that impacts businesses across Pakistan. On Thursday, the FBR announced that it would waive the affidavit requirement for sales tax returns for the tax period of September 2024, which are to be filed in October 2024. This move comes in response to requests from various trade bodies, who expressed concerns regarding the affidavit's necessity. The FBR's decision aims to foster confidence among stakeholders and provide temporary relief to taxpayers.

The affidavit was initially introduced by the FBR to ensure that authorized representatives and Chief Financial Officers (CFOs) are aware of their legal obligations under the Sales Tax Act. It serves to remind them of the potential criminal liabilities they could face if they submit false information in their tax returns. However, the FBR has clarified that this affidavit does not create any new legal obligations. Registered taxpayers must remain vigilant, as declaring fake invoices or suppressing sales is a serious offense under the sales tax law.

In light of recent data analysis, the FBR observed troubling trends in the sales tax returns filed by major businesses. It was found that some authorized representatives and CFOs were not exercising due diligence, leading to significant discrepancies in the reported figures. This situation prompted the FBR to require an affidavit from these officials to confirm the accuracy of the sales tax returns. However, the FBR has received numerous representations from trade bodies, including the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), highlighting the hardships caused by this requirement.

As a result of the waiver, the FBR is now open to receiving alternative proposals from stakeholders until October 31, aiming to address the issue of falsified sales tax returns. This flexibility indicates the FBR's willingness to listen to the concerns of the business community and adapt its policies accordingly. The board may also consider modifying the particulars of the affidavit if valid concerns are raised.

The FBR's decision to waive the affidavit requirement for September 2024 sales tax returns is a welcome relief for many businesses facing challenges in compliance. It reflects the FBR's commitment to supporting the business community while maintaining the integrity of the tax system. As the deadline approaches, it is crucial for all registered taxpayers to remain diligent and ensure that their returns are accurate, as the consequences of negligence can be severe. This situation serves as a reminder of the importance of transparency and accountability in the business sector, ultimately contributing to a healthier economy for Pakistan.