Islamabad: Business leaders are urging the Federal Board of Revenue (FBR) to postpone requiring taxpayers to file an affidavit with their sales tax returns. They claim that while taxpayers can check the status of suppliers through the FBR system, they often lack insight into the entire supply chain and can be unfairly penalized for mistakes made by vendors, despite providing accurate information to the best of their ability.
Muhammad Jawad Bilwani, president, Karachi Chamber of Commerce and Industry (KCCI), said that the affidavit requirement forces taxpayers to certify the complete accuracy of the information provided. He noted that while they strive to provide correct information, mistakes made by sellers could result in penalties being imposed on taxpayers.
“This creates a very confusing situation,” Pilwani noted, suggesting that the FBR should either specify vendor companies from which it should procure or establish standard operating procedures (SOPs) for procurement. He stressed that current FBR checks only confirm whether a seller is blacklisted; If the seller is deemed compliant, purchases are made without further scrutiny.
He noted that FBR officials had previously advised the business community to check seller status on their website, a practice that has been common for years. However, with the new affidavit requirements, taxpayers are now at risk of penalties if sellers engage in tax evasion.
In a separate statement, Khurram Mukhtar, general patron of Pakistan Textile Exporters Association (PTEA), echoed these concerns and called for the chief financial officer (CFO) affidavit requirement to be deferred. He stressed that buyers lack access to the multi-tier supply chain and can only check the supplier’s status through the FBR system to ascertain whether they are on the Active Taxpayers List (ATL).
He stressed that holding buyers responsible for the entire supply chain is illogical, and urged the government to create a more favorable business environment that enhances trade volume, and thus tax revenues.
Mukhtar added: “We do not condone any violations and strongly call for adherence to tax policies. However, the government must develop a strategy that restores confidence to the business community.” He also stressed that FBR owes billions of dollars in legitimate refunds to businesses, which are currently facing a 19% financial burden due to the delay. He warned that such strict measures would only exacerbate the challenges faced by legitimate businesses.