Federal Board of Revenue (FBR) is proposing a significant crackdown on Sales Tax Act violations in the upcoming budget for 2024-25. This move aims to strengthen tax compliance through a dramatic increase in penalties for non-adherence.
Key Points:
- Steeper Penalties: The FBR proposes a tenfold increase in the minimum penalty for failing to maintain proper sales tax records (from Rs 10,000 to Rs 100,000).
- Stricter Audits: The FBR recommends a significant hike in fines for non-compliance with sales tax audit procedures.
- Deterrence Against Evasion: The minimum penalty for non-payment of sales tax is proposed to quadruple (from Rs 5,000 to Rs 20,000).
- Broader Compliance: The FBR targets a wider range of sales tax violations with a potential fourfold increase in minimum penalties for unspecified offenses.
- Culture of Compliance: The FBR aims to discourage tax evasion and promote a culture of adherence to tax regulations.
Business Community Reaction:
- Mixed Reactions: Some businesses are apprehensive about the financial burden of these penalties, while others recognize the need for a stronger tax system.
Looking Ahead:
The final decision on penalty hikes rests on budget approval. If implemented, these measures will signify the FBR’s commitment to stricter enforcement of sales tax regulations. However, the success of this approach will depend on effective implementation and its impact on businesses.
