The Federal Board of Revenue (FBR) has said that maintaining transactions details over Rs10,000 has been made mandatory for wholesalers, distributors, dealers, and commission agents.
The new guidelines mandate the maintenance of detailed records for transactions exceeding Rs10,000, imposing specific documentation criteria on taxpayers with business income exceeding Rs. 500,000.
Under these directives, the following record-keeping requirements are now mandatory:
(a) Serially Numbered and Dated Cash-Memo / Invoice / Receipt:
• Taxpayer’s Information: Each transaction of sale or receipt must include the taxpayer’s name or the name of their business, address, national tax number or CNIC, and sales tax registration number (if applicable).
• Goods or Services Details: A detailed description, quantity, and value of goods sold or services rendered.
• For Wholesalers, Distributors, Dealers, and Commission Agents: In case of a single transaction exceeding Rs.10,000, the name and address of the customer must be recorded. For transactions below Rs.100, one or more cash memos per day may be maintained.
(b) Cash Book and/or Bank Book or Daily Record:
• Daily record of receipts, sales, payments, purchases, and expenses. A single entry per day for various financial activities will be sufficient.
(c) General Ledger or Annual Summary:
• Summary of receipts, sales, payments, purchases, and expenses categorized under distinctive heads.
(d) Vouchers of Purchases and Expenses:
• For transactions exceeding Rs.10,000, the vouchers must include the name and address of the payee.
(e) Quarterly Inventory of Stock-in-Trade:
• For businesses dealing in the purchase and sale of goods, a quarterly inventory of stock-in-trade is required. This inventory should detail the description, quantity, and value of the stock.
These new guidelines come as part of the FBR’s efforts to enhance transparency, combat tax evasion, and streamline record-keeping practices within the business community. By setting specific criteria for documentation, the FBR aims to ensure that financial transactions are accurately recorded and reported, fostering a culture of compliance among businesses.
The requirements particularly target wholesalers, distributors, dealers, and commission agents, acknowledging their significant role in the supply chain. The detailed record-keeping will not only aid tax authorities in monitoring business activities but will also provide businesses with a structured framework for maintaining financial records.
Businesses falling under these criteria are encouraged to promptly update their record-keeping practices to comply with the new guidelines. The FBR’s commitment to strengthening the financial infrastructure aligns with broader government initiatives aimed at creating a fair and accountable economic environment in Pakistan. The implementation of these record-keeping standards is expected to contribute to improved tax compliance and ensure the accuracy and reliability of financial data reported by businesses.