Karachi, December 10, 2023 – Federal Board of Revenue (FBR) has empowered tax officials with free access for monitoring imported goods during tax year 2024.
The move is part of the FBR’s ongoing efforts to strengthen tax compliance and ensure transparency in business operations.
In a recent development, the FBR announced updates to the Income Tax Rules, 2002 specifically for the tax year 2024. The key highlight of these updates is the empowerment of the Commissioner Inland Revenue, who will now have free access to monitor stocks, inspect business records, and scrutinize documents related to imported goods.
Rule 40F of the Income Tax Rules, 2002 outlines the powers granted to the Commissioner Inland Revenue in this regard. The rule emphasizes the authority of the Commissioner or an officer authorized by the Commissioner to have unrestricted access to premises, registered offices, or any other locations where stocks, business records, or documents required under the rules are kept or maintained. This includes businesses whose activities fall under the purview of these rules.
The rule further stipulates that the authorized officer may, at any time, conduct inspections to verify various aspects. These include, but are not limited to, checking the production capacity and stock consumption as declared by the taxpayer. Additionally, the officer will assess whether the imported raw materials align with the declared manufacturing activity or capacity, ensuring they are being used solely for the taxpayer’s own production purposes.
“The objective is to ensure that businesses are accurately reporting their production capacities and utilizing imported raw materials in a manner consistent with their declared activities,” stated the FBR spokesperson.
Furthermore, the Commissioner has the authority to conduct audits of consumption, production, and sales for the latest Tax Year for which the income tax return has been filed. This audit can take place at any time during the year to verify that the annual production aligns with the consumption of raw materials and adheres to the input-output co-efficient.
The FBR’s move reflects a proactive approach to curbing tax evasion and promoting accountability in business operations. By empowering tax officials with enhanced monitoring capabilities, the FBR aims to create a more robust system that encourages accurate reporting and discourages any attempts at misrepresentation.
As businesses navigate the evolving regulatory landscape, the FBR’s emphasis on transparency and compliance is expected to have a significant impact on shaping a fair and accountable business environment in the country.
