The Federal Board of Revenue (FBR) of Pakistan has made it mandatory for businesses to submit their balance sheets as part of their tax compliance requirements. This requirement, which came into effect in 2024, aims to curb the practice of fake invoicing and ensure that businesses are paying their fair share of taxes.
Why is it important to submit a balance sheet?
There are several reasons why businesses should submit their balance sheets to the FBR:
- To prevent fake invoicing: Fake invoicing is a major problem in Pakistan, and it costs the government billions of rupees in lost revenue each year. By requiring businesses to submit their balance sheets, the FBR can better identify and track down those who are engaging in this fraudulent practice.
- To ensure tax compliance: The balance sheet is a key document that provides information about a business’s financial position. By reviewing balance sheets, the FBR can ensure that businesses are accurately reporting their income and paying the correct amount of taxes.
- To improve tax administration: The FBR can use the information collected from balance sheets to improve its tax administration and make it more efficient and effective.
What are the requirements for submitting a balance sheet?
The following are the requirements for submitting a balance sheet to the FBR:
- The balance sheet must be submitted electronically through the FBR’s Iris portal.
- The balance sheet must be in the prescribed format and must be certified by a qualified accountant.
- The balance sheet must be submitted by the deadline specified by the FBR i.e April 06, 2024.
What are the consequences of not submitting a balance sheet?
Businesses that fail to submit their balance sheets to the FBR may face the following consequences:
- Penalties and fines
- Suspension of their tax registration
- Suspension of sales tax registration filing
- Legal action
How to submit a balance sheet?
The following are the steps on how to submit a balance sheet to the FBR:
- Go to the FBR’s Iris portal.
- Log in to your account.
- Click on the “Tax Returns” tab.
- Select “Balance Sheet” from the drop-down menu.
- Fill out the required information.
- Upload the balance sheet in the prescribed format.
- Submit the balance sheet.
Balance sheet can also be submitted manually to FBR Office, keep in mind to take the receiving and keep a copy for your own record.
Balance sheet shall be prepared as at 31st March 2024.
Conclusion
Submitting a balance sheet to the FBR is an important requirement for businesses in Pakistan. By complying with this requirement, businesses can help to prevent fake invoicing, ensure tax compliance, and improve tax administration.
