FBR Launches Single Sales Tax Return for Telecom Sector

FBR Launches Single Sales Tax Return for Telecom Sector

Islamabad, February 1, 2024 – In a groundbreaking move towards enhancing efficiency and reducing compliance costs, the Federal Board of Revenue (FBR) has officially launched a single sales tax return for the telecom sector, encompassing entities registered with both federal and provincial tax authorities.

This initiative, introduced in the first phase, is a pivotal step in the government’s commitment to facilitating taxpayers and promoting ease of doing business, as per the FBR announcement on Thursday. The single sales tax portal/return has been developed in collaboration with all provincial sales tax authorities to simplify the process of filing sales tax returns.

The FBR underscores that this innovative approach aims to enhance user experience, minimize errors, and provide a centralized platform for accessing relevant tax information. The unified system is expected to promote better compliance and facilitate smoother communication between taxpayers and tax authorities. By streamlining processes and reducing duplication, both taxpayers and tax authorities stand to benefit from cost savings.

Through the Integrated Risk Information System (IRIS) portal, sales tax registered entities in the telecom sector can now file a single sales tax return, eliminating the need to file separate returns with both the FBR and individual provincial sales tax authorities. This streamlining process is anticipated to save time, effort, and simplify the overall return filing process.

The new system addresses concerns related to data entry and calculation errors by allowing for the apportioning of input tax adjustments and tax payments across various sales tax authorities. This eliminates the need for reconciliation and payment transfers, providing a seamless and error-free experience for businesses.

A significant advantage of this system is its potential to encourage harmonization of tax procedures across federal and provincial government revenue authorities. This move towards uniformity is expected to promote national unity and create a more cohesive tax framework.

The FBR has rolled out the single sales tax return system in the first phase exclusively for the telecommunications sector. This includes major players such as M/s CMPak Limited, M/s Pakistan Mobile Communications Limited, M/s Pak Telecom Mobilink Limited, M/s Telenor Pakistan (Pvt.) Limited, and M/s Pakistan Telecommunication Company.

To facilitate a smooth transition, the FBR has enabled the uploading of sales tax invoices for the tax period of January 2024. Notably, the old sales tax return system will not be available for filing returns related to the telecommunication sector for January 2024. This transition period aims to allow registered entities to familiarize themselves with the new system.

The introduction of the single sales tax return for the telecom sector is a transformative step towards modernizing tax procedures, fostering better compliance, and aligning with the government’s broader agenda of promoting ease of doing business in Pakistan. This innovative approach is expected to set the stage for similar reforms across other sectors, contributing to a more efficient and harmonized tax regime in the country.