The Pakistan Tax Bar Association (PTBA) has urged the Chairman of the Federal Board of Revenue (FBR) to consider amending SRO No.350(I)/2024 pertaining to the corporate sector, expressing concerns that the current regulations could jeopardize economic activity and tax collection.
In a letter addressed to the FBR Chairman on Thursday, the PTBA acknowledged the significance of digitalizing the taxation system and commended the efforts made by the FBR to enhance the system’s efficiency. However, upon reviewing SRO No. 350(I)/2024 issued on March 07, 2024, the PTBA highlighted several fundamental issues that, if not addressed, could adversely affect economic activity and tax revenue collection.
One of the key concerns raised by the PTBA is regarding the requirement for filing a balance sheet within 30 days for individuals, associations of persons, and companies with a single shareholder or member other than the manufacturer. The PTBA suggested that since taxpayers already submit balance sheets along with their income tax returns, assessing officers could easily access this information. They proposed that if the balance sheet is not provided with the return, the assessing officer could issue an electronic notice to file it within the stipulated time.
Additionally, the PTBA questioned the requirement for taxpayers with a turnover exceeding five times their capital to seek permission from the Commissioner through IRIS. They argued that various business activities, such as credit facilities, bank loans, and advances received from suppliers, could lead to increased turnover and should be considered before penalizing taxpayers. The PTBA proposed that if the balance sheet reflects any of these factors contributing to increased turnover, the taxpayer should not be penalized.
Furthermore, the PTBA suggested amendments to the new proviso added in rule (30), sub-rule (3), which mandates prior approval from the Commissioner for issuing credit notes. They recommended that the Commissioner be granted approval for issuing credit notes within seven days from the date of the request, considering the specified sales tax filing returns date in the law.
In conclusion, the PTBA urged the FBR Chairman to make appropriate amendments to SRO No.350(I)/2024 to facilitate compliant taxpayers in adhering to the provisions of the amendment smoothly and without any complications.
