Karachi, September 15, 2024 – The Federal Board of Revenue (FBR) has announced the continuation of the tax credit facility for taxpayers who are reporting their sales on a real-time basis during tax year 2024-25.
This move is aimed at encouraging businesses to integrate their sales systems with the FBR’s computerized platform to promote transparency and ensure accurate tax reporting.
The FBR recently updated the Income Tax Ordinance, 2001, as of June 30, 2024, and retained the provision of tax credit for businesses providing real-time access to their sales under Section 64D of the Ordinance. This section provides an incentive for businesses to invest in point-of-sale (POS) systems, a crucial step in digitizing Pakistan’s tax infrastructure.
According to the FBR, Section 64D of the Income Tax Ordinance, 2001 stipulates:
1. Any individual or business required to integrate with the FBR’s computerized system for real-time sales reporting will be entitled to a tax credit for the amount invested in purchasing a point-of-sale (POS) machine.
2. The tax credit for the tax year in which the POS machine is installed, integrated, and configured with the FBR’s system will be the lesser of:
o The amount actually invested in the purchase of the POS machine, or
o A maximum of Rs. 150,000 per machine.
3. The term point-of-sale machine refers to a device used for processing and recording sales transactions, either through cash, credit/debit cards, or online payments in an internet-enabled environment.
This continuation of tax credit is part of the FBR’s broader strategy to digitize tax collection, improve sales reporting accuracy, and reduce tax evasion. By offering tax incentives, the FBR aims to encourage more businesses, particularly in the retail and service sectors, to adopt real-time sales reporting. This step also assists businesses in streamlining their operations and ensuring compliance with national tax regulations.
Real-time reporting is expected to boost revenue collection and minimize tax discrepancies. It ensures that sales data is promptly captured, reducing the chances of misreporting or underreporting sales, which has been a persistent issue in the informal sectors of the economy. Additionally, real-time integration allows the FBR to maintain a comprehensive and up-to-date database of sales transactions across the country.
The tax credit facility has been well-received by businesses looking to reduce their tax liability while investing in necessary technological infrastructure. The FBR’s initiative not only incentivizes businesses to comply with tax regulations but also contributes to the ongoing digital transformation of Pakistan’s financial system.
