Karachi, August 5, 2024 – In a significant move to modernize and streamline the tax system, the Federal Board of Revenue (FBR) has unveiled new provisions aimed at digitizing the supply chain. Announced on Monday, these changes are part of the Sales Tax Act, 1990, and come in the wake of the Finance Act, 2024.
The FBR’s Circular No. 3, issued today, outlines the key updates introduced under the recent Finance Act. These reforms are designed to enhance efficiency and compliance within the tax framework by leveraging digital technology.
One of the major changes is the introduction of the term ‘Licensed Integrator,’ defined under a new clause (15A) in Section 2 of the Sales Tax Act. A Licensed Integrator is essentially an entity authorized by the FBR to provide electronic invoicing systems. These systems are crucial for integrating registered persons, ensuring that all transactions are processed in a standardized, electronic format.
In conjunction with this, a new provision, serial No.25AA, has been added to Section 33 of the Act. This new addition outlines penalties for Licensed Integrators who fail to meet integration requirements. This move underscores the FBR’s commitment to enforcing compliance and maintaining the integrity of the digitization process.
Additionally, Section 23 of the Sales Tax Act has been revised to mandate that certain registered persons issue electronic invoices. This requirement will be subject to conditions and restrictions as set by the FBR. This change aims to ensure that all relevant transactions are captured electronically, reducing the scope for errors and fraud.
Further reforms include the addition of new sub-sections (4) and (5) to Section 40C of the Sales Tax Act. These amendments grant the FBR the authority to require specific individuals or classes of individuals to integrate their electronic invoicing systems with the FBR’s Computerized System. This integration will facilitate real-time reporting of sales, enhancing transparency and efficiency in tax reporting.
The FBR’s latest reforms are expected to have a transformative impact on the tax landscape, making it easier to track and manage transactions while reducing manual processing errors. As businesses adapt to these new requirements, the aim is to foster a more transparent and efficient tax system that benefits all stakeholders involved.
The FBR’s proactive approach to supply chain digitization marks a significant step forward in modernizing Pakistan’s tax administration, aligning it with global standards and improving overall economic efficiency.
