Lahore, January 7, 2024 – The Lahore Chamber of Commerce and Industry (LCCI) has called upon tax authorities to provide much-needed relief to retailers, citing concerns over recent policy changes.
LCCI President Kashif Anwar, in a letter addressed to the Federal Board of Revenue (FBR) Chairman Malik Amjed Zubair Tiwana, urged amendments to S.R.O 1842(1)2023 dated 21-12-2023.
The primary focus of contention surrounds a recent notification amending rule 150ZEA of the sales tax rules, 2006, specifically targeting Tier-1 retailers under section 2(43A) (g) of the sales tax act, 1990. According to the revised rule, retailers with a deductible withholding tax under section 236 H of the Income Tax Ordinance 2001 exceeding Rs. 100,000/- in the last 12 months are now required to integrate with the point of sale (POS) system.
President Kashif Anwar highlighted the potential adverse impact of this amendment on retailers across 21 different sectors/products. He emphasized their lack of expertise, technical know-how, and financial resources to comply with these new regulations.
The crux of the matter lies in the additional burdens imposed on retailers. Anwar pointed out that the previous budget had withdrawn the condition of 1000 sq ft due to the efforts of the business community. Still, the imposition of 236 H instead of enhancing turnover and reducing tax rates has created new challenges.
Anwar noted that compliance with the new regulations would necessitate hiring professional accountants for record maintenance, filing statements, and reporting to the Federal Board of Revenue (FBR). Additionally, the installation of POS systems would further escalate costs for these already economically challenged retailers.
The LCCI President expressed deep concern over the potential ramifications, asserting that these burdens could lead to severe challenges for retailers. Compliance difficulties may result in penalties, exacerbating their financial strain.
Highlighting the urgency of the matter, Kashif Anwar called for immediate intervention by Chairman FBR to address the predicament. In his letter, Anwar proposed a concrete solution, urging Chairman FBR to consider amending the said SRO by substantially raising the prescribed threshold of deductible withholding tax for POS system integration. Specifically, he proposed an increase of the deductible threshold from Rs. 100,000/- to Rs. 500,000/-.
Anwar emphasized that this adjustment would greatly favor retailers, enabling them to work smoothly and comply with evolving tax regulations. The outcome of this appeal could potentially shape the landscape for retailers, determining the ease of compliance with the changing tax environment.
