Committee formed to hunt tax evaders in supply chain

Committee formed to hunt tax evaders in supply chain

ISLAMABAD: The Federal Board of Revenue (FBR) on Thursday constituted a committee to hunt for tax evaders in supply chain i.e. manufacturers, importers, distributors, retailers etc.

According to a FBR notification, the committee shall identify wholesalers, distributors, small, medium and large manufacturers/importers who potentially have taxable income but neither, they have been brought into the tax base of Pakistan nor being part of the tax base but are evading and suppressing taxes and invoices.

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It will define the potential target market and quantify the size of the target market.

The committee shall develop a business plan comprising of budget pertaining to project plan, human, IT and infrastructure resources required to bring the potential target market into the tax base, in order to generate incremental tax revenue.

It will obtain legal and regulatory protection, facilitation and support of stakeholders in order to achieve the objective in collaboration and support of the FBR.

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The committee shall have mandate to define policy and rules for a licensing framework for appointment of intermediaries who will coordinate and facilitate the integration of supply chain to capture and report all sales transactions.

It will coordinate with various associations and trade bodies to facilitate the integration of supply chains.

The committee shall have powers of controlling, monitoring and implementation of supply chain capture integration program in coordination with the IRS Operations.

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It will develop a correlation between invoice and digital/electronic payments for the purpose of audit, in coordination with necessary stakeholders including but not limited to State Bank of Pakistan (SBP).

The committee shall have mandate to leverage software to capture the entire supply chain from manufacturer, distributor, wholesaler, retailer and customers to capture transactions, withholding tax information and use the developed database to capture potential taxpayers.

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It further have mandate to leverage data analytics to capture sales tax demand on the input/output at each stage of supply chain from manufacturer to end consumer, thereby bringing unregistered distributors, sub-distributors and retailers into the tax net.

The committee will develop organizational structure required to deliver on the above Terms of Reference (TORs) based on size of potential target market, physical dispersion of potential target market, and committed time lines for achieving TORs.