Biometric Verification – A Secure Step in Sales Tax Registration

The Federal Board of Revenue (FBR) of Pakistan has implemented a crucial step to ensure transparency and security in the sales tax registration process – biometric verification. This article explains how this verification works and its importance for businesses registering for sales tax.

Simplified Registration, Secure Verification:

The FBR allows businesses to conveniently register for sales tax through online applications like Iris or Tax Asaan. However, to complete the registration and gain access to filing sales tax returns, biometric verification at a NADRA e-Sahulat Center is mandatory.

What is Biometric Verification?

Biometric verification involves confirming a person’s identity by using unique biological characteristics, typically fingerprints or facial recognition. In this case, visiting a NADRA e-Sahulat Center allows the authorities to verify your identity using your fingerprints, ensuring that the person registering for sales tax is indeed who they claim to be. In addition to ist time verifications, Sales Tax Registered Businesses are now required to make verifications annualy each year before July 31st. The e-sahulat centers have been notified about the change just recently so now you can make your business verified.

The Verification Process: Online First, Then NADRA

To avoid complications, taxpayers must follow a specific two-step procedure:

1. Online on IRIS Portal (First Step):Before visiting any NADRA e-Sahulat center, the designated individual (Individual himself, Principal Officer of AOP, or Director of SMC) must first complete a nomination process on the FBR’s IRIS portal.
   • Log in to your IRIS account.
   • Navigate to your Profile page.
   • Click on “Sales Tax Biometric Verification.”
   • For individuals and SMCs, the system will typically display the relevant person. For AOPs (partnerships) with multiple partners, a drill-down option will appear. The Principal Officer must then select and confirm the designated person for biometric verification from the list of partners.
   • Upon successful nomination, the system will display a confirmation message indicating that the nominee for sales tax biometric verification has been successfully updated.
2. Visit NADRA e-Sahulat Center (Second Step):Only after successfully completing the online nomination on the IRIS portal should the designated individual visit their nearest NADRA e-Sahulat Center.
   • Required Documents: Carry your original CNIC, NTN number (of the individual/AOP/company), and the sales tax registration number.
   • Procedure: Pay a small fee and complete the biometric verification process. Obtain a slip as proof of completion for your records.

Why is Biometric Verification Important?

Biometric verification offers several advantages for both the FBR and businesses:

• Prevents Fraud: By verifying the identity of the applicant, biometric verification helps prevent fraudulent registrations and ensures only legitimate businesses are registered for sales tax.
• Enhances Security: This verification strengthens the integrity of the sales tax system, minimizing the risk of errors or manipulation.
• Streamlines Process: For businesses, completing biometric verification within a month of initial registration ensures a smooth transition to filing sales tax returns.

Consequences of Non-Verification:

If a business doesn’t complete biometric verification within the one-month timeframe after registering through the mobile applications, and the deadline for annual verfication (usually July 31 unless extended by FBR), they will be removed from the Sales Tax Active Taxpayer List. This essentially means they won’t be able to file sales tax returns and could potentially face penalties for non-compliance.

Biometric verification is a secure and efficient step added to the sales tax registration process in Pakistan. It fosters a more reliable tax system for both the FBR and businesses. By completing this verification within the designated timeframe, businesses can ensure they are compliant with regulations and can file their sales tax returns without any hurdles.

Exemptions for “No Fingerprints” Cases

For individuals who genuinely cannot provide fingerprints (e.g., due to medical conditions, injuries, or advanced age), an exemption process is available. This typically involves submitting a sworn affidavit and undergoing verification through NADRA’s alternative identification methods. The FBR may also require additional documentation to ensure the authenticity of such claims.

The FBR’s directive emphasizes the critical need for all sales tax registered persons to prioritize this annual biometric verification. Completing it promptly within July will ensure seamless tax compliance and avoid unnecessary complications with sales tax return submissions.