Karachi, March 22, 2024 – The Pakistan Tax Bar Association (PTBA) has voiced reservations regarding the implications of SRO 350 of 2024, recently notified by the Federal Board of Revenue (FBR).
In a letter addressed to FBR Chairman Amjad Zubair Tiwana, the PTBA highlighted several fundamental issues that, if left unaddressed, could potentially impact economic activity and tax revenue collection.
The PTBA conducted a thorough review of SRO No. 350/(I)/2024 issued on March 07, 2024, and expressed concerns over certain provisions outlined within the notification. The association emphasized the necessity for prompt action to rectify these concerns and ensure the effectiveness of the measures introduced.
Key Observations and Concerns Raised by the PTBA:
1. Requirement for Filing Balance Sheet: The PTBA raised concerns regarding the requirement for individuals, associations of persons, and companies with only one shareholder or member (other than the manufacturer) to file their balance sheets within 30 days. The association argued that since taxpayers already submit balance sheets along with their income tax returns, assessing officers should be able to access this information directly. They proposed that if the balance sheet is not provided with the tax return, the assessing officer could issue an electronic notice to file it within the stipulated time frame.
2. Permission Requirement for Turnover: Rule 18 stipulates that taxpayers must seek permission from the Commissioner through IRIS if their turnover exceeds five times their capital. The PTBA highlighted the diverse modes of business activities, including credit facilities, bank loans, advances received from suppliers, and personal loans, which can significantly impact turnover. They suggested amending the rule to consider these factors and requested that if the balance sheet reflects any such reasons for increased turnover, the taxpayer should not be penalized.
3. Approval Process for Credit Notes: The PTBA expressed concerns about the new proviso added to rule (30), sub-rule (3), which requires prior approval from the Commissioner for issuing credit notes. They recommended streamlining the approval process by granting the Commissioner approval within seven days from the date of the request, aligning it with the specified sales tax filing returns date.
In light of these observations and suggestions, the PTBA urged the FBR chairman to issue directives for appropriate amendments to SRO 350 of 2024. They emphasized the importance of enabling compliant taxpayers to fully adhere to the provisions of the amendment and ensure a smooth and hassle-free implementation process.
The PTBA’s initiative underscores the importance of constructive dialogue between tax authorities and stakeholders in refining tax policies to promote compliance and facilitate economic growth. As discussions continue, stakeholders anticipate a collaborative approach to address the concerns raised and enhance the effectiveness of tax regulations in Pakistan.
