Karachi, May 8, 2024 – The Federal Board of Revenue (FBR) has amended the requirements for submitting balance sheets along with monthly sales tax returns.
The change was introduced via a new notification, SRO 644(I)/2024, issued on May 7, 2024, adjusting the earlier stipulations outlined in the Sales Tax Rules, 2006.
Previously, under SRO 350(I)/2024, the FBR mandated all registered taxpayers to include a complete balance sheet when filing their monthly sales tax returns. This move, initially aimed at enhancing transparency and compliance, had inadvertently placed a substantial administrative and financial burden on businesses, especially small and medium-sized enterprises (SMEs). The requirement led to widespread concern within the business community, culminating in delayed sales tax returns for March 2024 as companies struggled to comply with the new rules.
Responding to feedback and criticisms from various business quarters, the FBR has now simplified the documentation process. Taxpayers are permitted to submit a summary statement detailing the sum of their capital and liabilities, rather than a full balance sheet. This adjustment is aimed at reducing the compliance burden while maintaining the integrity of the tax system.
“The revised rule will help SMEs manage their compliance costs better and ease the procedural challenges they faced under the earlier regulation,” said an official at the FBR. “We are committed to facilitating a business-friendly environment while ensuring that the tax base remains broad and secure.”
The notification further clarifies the language used in the rule, stating that the previously used term “declared business capital” will now be replaced by “sum of the capital and liabilities declared in the balance sheet.” This change is expected to provide clearer guidance to taxpayers on how to comply with the filing requirements.
Economists and tax experts have largely welcomed the amendment. “This is a practical approach that balances the need for detailed financial information with the administrative capabilities of smaller businesses,” commented a tax consultant. “It should help streamline the tax filing process and improve overall compliance rates, which is beneficial for both the businesses and the tax authorities.”
Business owners are also reacting positively to the news. “The initial requirement was quite burdensome for us,” said the tax consultant. “The new amendment will definitely make it easier for us to manage our monthly filings without compromising on our operational focus.”
The FBR has announced that the new rule will take effect immediately, aiming to alleviate any further delays in tax filings and assist businesses in adjusting to the changes with minimal disruption.
