Taxpayers to pay penalty on failure to provide information

Taxpayers to pay penalty on failure to provide information

Section 33(10) of Sales Tax Act, 1990 stated that taxpayers in failure to provide information are required to pay penalty.

The Federal Board of Revenue (FBR) has intensified its efforts to ensure tax compliance with the latest amendment to the Sales Tax Act, 1990. Under Section 33(10) of the Act, taxpayers who fail to submit required information to the FBR, as stipulated in Section 26, will now face a penalty of Rs10,000. The amendment, incorporated through the Finance Act, 2021, is part of the FBR’s ongoing initiatives to enhance transparency and streamline tax-related processes.

Section 33(10) of the Sales Tax Act, 1990, reads as follows:

33. Offences and Penalties – Whoever commits any offence shall, in addition to and not in derogation of any punishment to which he may be liable under any other law, be liable to the penalty mentioned against that offence:

10. Any person who fails to furnish the information required by the Board through a notification issued under sub-section (5) of section 26. Such person shall pay a penalty of ten thousand rupees.

This latest provision targets individuals or entities who neglect to provide information as demanded by the FBR through notifications issued under sub-section (5) of section 26. The move is a strategic step by the FBR to ensure that taxpayers fulfill their obligations promptly and contribute to the broader goal of a transparent and accountable taxation system.

The Rs10,000 penalty for non-compliance aims to act as a deterrent, emphasizing the importance of timely submission of required information. Section 26 of the Sales Tax Act, 1990 likely encompasses specific details or data that the FBR deems necessary for effective tax administration. By imposing penalties for failure to furnish this information, the FBR seeks to expedite the tax-related processes and minimize delays caused by incomplete or inaccurate data.

While the amendment is seen as a positive step towards enhancing tax compliance, concerns have been raised about the potential impact on smaller businesses. Critics argue that, for smaller enterprises with limited resources, a flat penalty of Rs10,000 may pose a significant financial burden. Striking a balance between enforcement and recognizing the diverse nature of businesses remains a challenge for regulatory bodies.

The inclusion of Section 33(10) in the Sales Tax Act, 1990 underscores the FBR’s commitment to robust tax administration. The imposition of a Rs10,000 penalty for failing to submit required information reflects a determined effort to ensure taxpayer compliance. As these amendments come into effect, it will be essential for the FBR to provide clear communication and support to businesses, particularly smaller ones, to facilitate smooth compliance and foster a cooperative approach to taxation.