Karachi, Pakistan – Taxpayers in Karachi are facing significant hurdles in complying with sales tax regulations due to the recent reintroduction of sales tax on advances and the lack of corresponding updates in the Inland Revenue Information System (IRIS).
The Karachi Tax Bar Association (KTBA) has raised concerns about the challenges arising from the mismatch between the legal framework and the practical implementation of the new rules. While the government has reinstated sales tax on advances, the IRIS system has not been adequately adapted to accommodate these changes.
One of the major issues highlighted by the KTBA is the difficulty in declaring sales tax on advance receipts and claiming credit through adjustments. The new rules have introduced complexities in the taxpaying process, and taxpayers are struggling to navigate the system effectively. Business Recorder
Furthermore, the KTBA has criticized the recent restrictions imposed by the Federal Board of Revenue (FBR) on the declaration of credit notes. These restrictions have made it challenging for suppliers to issue credit notes without first obtaining debit notes from buyers, leading to delays and administrative burdens.
The KTBA has called upon the FBR to provide clear guidelines and clarifications on how taxpayers can declare advance invoices and make necessary adjustments in their tax returns. By addressing these issues, the FBR can help alleviate the burdens faced by taxpayers and ensure a more efficient and compliant tax system.
