Karachi, August 9, 2024 – In a move aimed at tightening tax compliance, the Federal Board of Revenue (FBR) has announced a mandate requiring several categories of individuals and businesses to obtain mandatory sales tax registration.
This step is part of the FBR’s ongoing efforts to enhance transparency and improve the efficiency of tax collection.
The FBR has identified the following groups as mandatory for sales tax registration:
1. All Importers: Every entity engaged in importing goods into Pakistan must now register for sales tax to ensure proper tax collection on imported items.
2. Wholesalers and Distributors: This category includes all wholesalers, dealers, and distributors, emphasizing a broader scope of tax registration to cover various layers of the supply chain.
3. Manufacturers: The mandate applies to manufacturers who do not fall under the cottage industry category. The cottage industry is defined as manufacturers with an annual turnover from taxable supplies not exceeding PKR 10 million or whose annual utility bills (electricity, gas, and telephone) do not surpass PKR 800,000.
4. Retailers (Tier-1): This includes:
o Retailers operating as units of national or international store chains.
o Retailers in air-conditioned shopping malls, plazas, or centers (excluding kiosks).
o Retailers with cumulative electricity bills exceeding PKR 600,000 in the preceding twelve months.
o Wholesalers-cum-retailers engaged in bulk imports and supplies of consumer goods both wholesale and retail.
5. Service Providers: Entities required by provincial or federal laws to be registered for any duty or tax that resembles a sales tax, such as hotels, clubs, caterers, customs agents, ship chandlers, stevedores, and courier services.
6. Zero-Rated Supply Providers: This includes commercial exporters seeking sales tax refunds against their zero-rated supplies.
The FBR has warned that any individual or entity meeting the above criteria but failing to comply with the registration requirement will face compulsory registration after a proper inquiry under Rule 6 of the Sales Tax Rules, 2006. This measure aims to address potential non-compliance and ensure that all relevant businesses are contributing fairly to the tax system.
This move by the FBR is expected to streamline the tax registration process and enhance compliance across various sectors of the economy, reinforcing the government’s commitment to strengthening the tax framework and improving revenue collection.
Note: The above information has been extracted from the FBR Portal. For further inquiry please contact to the FBR Help Desk.
