This article explains recent changes to sales tax registration, including a new requirement for annual biometric verification. Businesses registered for sales tax in Pakistan now have to undergo an annual verification process. This mandate was recently announced and will require all businesses to be verified before July 31st of each year.

Key Points:

• Biometric Verification: All businesses registered for sales tax must undergo annual biometric verification in July.
• Verification Process:
  
  • One-time verification is done at registration (NADRA Center).
  • Pre-verification happens at the time of registration.
  • Post-verification will be conducted annually in July (going forward).
  • Failure to verify could lead to return filing issues.
• Purpose of Verification:
  
  • Control fake invoices and ensure proper tax collection.
  • Identify businesses manipulating the supply chain for tax evasion.
  • Create a more transparent and accountable business environment.

• Annual Verification: Sales tax registered businesses must verify their information yearly.
• Verification Deadline: The verification process needs to be completed before July 31st of each year.
• Location: The verification process will be conducted at e-sahulat centers across the country.

Important Update: The last date for verification has been extended by 1 month till September 30, 2024.

FBR’s Efforts for Digital Verification:

• Mobile App Verification: The FBR is actively working on developing a mobile app that will allow taxpayers to verify their identity through biometric means, regardless of their location. This will significantly enhance convenience and accessibility for taxpayers, especially those residing outside of Pakistan.
• Addressing Fingerprint Challenges: The FBR recognizes the difficulties faced by certain individuals, such as senior citizens or those with physical limitations, in providing fingerprints for verification. They are actively exploring alternative methods to accommodate these individuals.

Update for Non Residents:

FBR has issued various letters to Tax Bars requiring information about specific cases of Non residents or Senior Citizens or persons unable to verify via finger prints via NADRA. FBR is working on Biometric verification via mobile app. Where all taxpayers can do the verification via mobile app irrespective of their country of stay.
The digitalization of FBR processes is the need of the hour.

Contact Your RTO: If sales tax verification is not available in your country, reach out to your Regional Tax Office (RTO) via email with supporting documentation to request an exemption or waiver.

Additional Information:

• Businesses must also submit their balance sheet for new registeration.
• These new regulations are primarily targeted at businesses using fake invoices to avoid taxes.

Benefits:

• Creates a fairer market environment for legitimate businesses.
• Improves tax collection for the government.

Conclusion:

Understanding these new rules is crucial for businesses registered for sales tax. Annual biometric verification is mandatory and neglecting it can lead to complications with tax filings. The overall aim is to create a more transparent and controlled business landscape.