Major setback: FBR suspends CNIC condition for traders
Move to dent FBR's efforts to document the black economy.
ISLAMABAD:
The government has decided in principle to temporarily waive the condition that bound sellers to supply their commodities only after getting particulars from buyers – a move which will serve as a major setback to the drive to document the black economy.
Sources told The Express Tribune that the Federal Board of Revenue (FBR) has decided that the special treatment earlier extended to the influential sugar lobby would be given across the board for two months. They added that in the meantime the FBR would find a solution to the issue.
However, they insisted that the FBR will ultimately have to implement the condition.
On September 6, through a statutory regulatory order, the FBR made it mandatory for registered manufacturers, importers and exporters, who supply taxable goods to unregistered persons, to obtain Computerised National Identity Card or National Tax Numbers of such buyers.
In case of failure to comply with the directive, the FBR said it would not give tax refund to the manufacturers and they would have to pay sales tax against supplies made without getting particulars.
Later bowing to political pressure, the FBR exempted the sugar industry from the condition which created distortion in the market and also dented its drive to document the undocumented sectors of the economy.
Other influential lobbies like Pakistan Vanaspati Manufacturers Association and All Pakistan Textile Mills Association had also demanded a similar treatment.
The decision also reflects poorly on the FBR’s drive to actively pursue courts to get the stay orders vacated in cases involving Rs134 billion in disputed tax arrears.
The FBR’s Board-in-Council – the highest policymaking body – on Thursday decided to actively pursue cases in courts to get the stay orders vacated. The taxpayers have been successfully delaying the cases by getting extensions from the courts, which according to experts would not be possible without taking the FBR people on board.
The FBR has estimated to recover at least Rs10 billion from cases pending in courts. The amount is an integral part of the FBR’s annual tax target of Rs1,952 billion.
The FBR also reiterated its earlier stance of recovering Rs84 billion of illegal input tax adjustments. Of that, it has taken up Rs26 billion worth of cases.
Published in The Express Tribune, October 21st, 2011.
The government has decided in principle to temporarily waive the condition that bound sellers to supply their commodities only after getting particulars from buyers – a move which will serve as a major setback to the drive to document the black economy.
Sources told The Express Tribune that the Federal Board of Revenue (FBR) has decided that the special treatment earlier extended to the influential sugar lobby would be given across the board for two months. They added that in the meantime the FBR would find a solution to the issue.
However, they insisted that the FBR will ultimately have to implement the condition.
On September 6, through a statutory regulatory order, the FBR made it mandatory for registered manufacturers, importers and exporters, who supply taxable goods to unregistered persons, to obtain Computerised National Identity Card or National Tax Numbers of such buyers.
In case of failure to comply with the directive, the FBR said it would not give tax refund to the manufacturers and they would have to pay sales tax against supplies made without getting particulars.
Later bowing to political pressure, the FBR exempted the sugar industry from the condition which created distortion in the market and also dented its drive to document the undocumented sectors of the economy.
Other influential lobbies like Pakistan Vanaspati Manufacturers Association and All Pakistan Textile Mills Association had also demanded a similar treatment.
The decision also reflects poorly on the FBR’s drive to actively pursue courts to get the stay orders vacated in cases involving Rs134 billion in disputed tax arrears.
The FBR’s Board-in-Council – the highest policymaking body – on Thursday decided to actively pursue cases in courts to get the stay orders vacated. The taxpayers have been successfully delaying the cases by getting extensions from the courts, which according to experts would not be possible without taking the FBR people on board.
The FBR has estimated to recover at least Rs10 billion from cases pending in courts. The amount is an integral part of the FBR’s annual tax target of Rs1,952 billion.
The FBR also reiterated its earlier stance of recovering Rs84 billion of illegal input tax adjustments. Of that, it has taken up Rs26 billion worth of cases.
Published in The Express Tribune, October 21st, 2011.