Senate Committee on Finance discusses Sales Tax Provisions

The Senate Standing Committee on Finance and Revenue recently convened to deliberate on the Finance Bill, 2024, focusing primarily on Sales Tax Provisions. The main objectives were to increase transparency in tax processes and combat fraudulent activities within the system.

One of the key proposals put forth during the meeting was the mandatory use of Point of Sale (POS) systems by businesses. Failure to comply with this requirement, such as not issuing at least five receipts per week, could result in the closure of the non-compliant businesses. Additionally, the Federal Board of Revenue (FBR) is set to take charge of licensing POS software companies to prevent potential fraud incidents.

To further enhance oversight and visibility in online sales, a new integrated licensing system managed by a third-party entity will be implemented. Penalties for businesses failing to adhere to the POS regulations may include closure and a fine of up to Rs5 lac. The FBR has also introduced a monitoring dashboard to keep track of POS machines at retail outlets.

Another significant discussion revolved around the enforcement of credit card payments by retailers. Non-compliance with this regulation could lead to business closure, with the FBR committed to addressing consumer complaints and taking necessary actions against tax evaders, including blacklisting.

Recognizing the challenges faced by various business associations due to high taxation, the committee recommended dialogues between the FBR chairman and these groups. There were also suggestions to exempt stationary items from sales tax, considering the large number of out-of-school children in Pakistan.

The committee deferred further discussions on sales tax to the next meeting and rejected an unrelated amendment in the Finance Bill. The attendees, including senators, the FBR chairman, and senior officials, emphasized the importance of these deliberations in shaping the country's financial landscape.