FBR issues list of 6,763 non-integrated retailers

FBR issues list of 6,763 non-integrated retailers

The Federal Board of Revenue (FBR) took a decisive step on Tuesday by releasing a list comprising 6,763 retailers who have yet to integrate their point of sale (POS) systems with the tax system.

This move comes as part of the FBR’s broader strategy to enhance tax compliance and streamline financial transactions within the retail sector.

In a Sales Tax General Order (STGO) No. 1 of 22, titled “Tier-Retailers – Integration with the FBR’s POS system,” the FBR emphasized the adoption of a system-based approach to integrate Tier-1 retailers. The integration process, effective from August 1, 2021, aims to bring transparency to sales tax reporting and curb tax evasion.

The FBR has made it clear that retailers falling under the Tier-1 category who have not integrated their POS systems by August 15, 2021, will face significant consequences. One of the key penalties outlined is the denial of credit for input tax, constituting approximately 60 percent of the total payable tax, for the month of July 2021. This move is expected to serve as a strong deterrent for non-compliant businesses, encouraging them to swiftly integrate their POS systems.

To facilitate transparency and compliance, the FBR has published a list of identified Tier-1 non-integrated retailers on its web portal. This list serves as a public record, allowing stakeholders and the general public to stay informed about the status of retailers with respect to POS integration.

In the event that a Tier-1 retailer believes it has been mistakenly categorized or wishes to contest its inclusion in the list, the FBR has outlined a mechanism for exclusion. According to the provisions outlined in Section 3(43A) of the Sales Tax Act, 1990, such retailers have until August 10, 2021, to apply to the Commissioner for exclusion from the list. This provision ensures that businesses have a fair opportunity to rectify any misclassification or dispute their inclusion in a timely manner.

The move towards integrating POS systems with the tax framework aligns with global best practices in tax administration and enhances the efficiency of tax collection processes. By leveraging technology, the FBR aims to minimize opportunities for tax evasion, promote accurate reporting, and create a level playing field for all retailers.

This initiative not only strengthens the government’s efforts to broaden the tax base but also underscores the FBR’s commitment to modernize and streamline tax administration. It is expected that this measure will encourage a culture of tax compliance among retailers, contributing to the overall economic stability and sustainability of the country.