Pakistan’s Federal Board of Revenue (FBR) is proposing significant changes for the retail sector in the upcoming federal budget for 2024-25. These proposals aim to enhance tax compliance and broaden the tax base.
Key Proposals:
- POS Fee Increase: The FBR proposes raising the fee levied on invoices generated through Point of Sale (POS) systems. The current fee of Rs. 1 per invoice may see an increase, though the exact revised amount remains undisclosed.
- POS System Registration Audit: Retailers who haven’t yet registered their POS systems could face special audits to ensure compliance with tax regulations.
- Track and Trace System Expansion: The FBR plans to incorporate the tiles sector into the existing Track and Trace system, which aims to monitor the movement of goods and prevent tax evasion.
- Digital Invoices Directorate Powers: The Directorate General of Digital Invoices might receive additional authority to strengthen oversight of the digital invoicing process.
- Single Sales Tax Return: The FBR is considering a simplified tax filing system for businesses through a single sales tax return for the next fiscal year.
- Unregistered Trader Monitoring: The tax authorities plan to monitor suppliers who do business with unregistered traders, potentially aiming to identify and bring these unregistered businesses into the tax net.
Industry Concerns:
The proposed measures have raised concerns among some industry players and chambers. The mandatory POS system registration implemented in December 2023 faced opposition from various sectors, highlighting potential implementation challenges.
Looking Ahead:
The final details of the FBR’s proposals will be unveiled in the upcoming budget announcement. If implemented, these changes could significantly impact the retail landscape in Pakistan. The success of these measures will depend on effective communication, collaboration with industry stakeholders, and addressing concerns regarding implementation feasibility.
