Islamabad:
The Federal Government has issued new instructions to pacify the Business Community protest and decided to gradually prohibit the main purchases, treat cash deposits such as digital transactions and linked the use of application powers with the consent of the Complaint Repair Committees.
The Federal Income Board (FBR) has issued two separate circular to explain the tax measures introduced in the budget and give effect to the understanding achieved with the business community. The Government has tried to address the concerns of merchants softening the harsh provisions of tax laws related to application measures with subordinate legislation.
According to the explanatory circular, the FBR said that “the Board will also ensure that the provisions related to the application are carried out judiciously with the repair committees, which consist of representatives of the business community and the Board.”
The merchants closed the stores in Lahore and Karachi last month against government measures, including it grants the FBR arrest powers in cases of fiscal fraud, which allows it to deal with half of the cash expenses above RS200,000 as income, deploy taxes in commercial premises and authorize them to arbitrarily reduce the tax reimbursement claims.
The FBR has now modified its position on cash expenses and declared that “when a person, either a holder of the number of national or other taxes, deposits the cash against invoices in the seller’s bank account, the payment will be discussed as if it has been made through the bank channel and the expense is not granted in this consideration under this clause.”
The explanation through subordinate legislation suggests a significant change in the previous FBR position.
The FBR, however, added that the power of no spending permission was aimed at allowing the formal sector to capture more market share compared to that of the informal sector. In addition, he said that this provision will not apply to agricultural products unless the intermediaries sell it.
This provision also authorizes the Board to exempt any kind of people subject to conditions and limitations, as appropriate.
While explaining the powers to arrest in cases of fiscal fraud, the FBR said that the powers and the investigation and investigation procedure in cases of sales tax fraud and other crimes that guarantee the prosecution under the Sales Tax Law have been simplified.
The arrest warrant can only be issued after the approval of a committee, which includes three FBR members, as can be notified by the president, and that also only in cases where fraud implies an amount greater than RS50 million and the nature of the fraud is within the scope of any of the first six sub clauses of the clause (37) of section 2, added.
The FBR said the officer can only arrest one person, if there is the possibility that the defendant can manipulate the documents, the defendant can escape and the accused does not help investigations despite three notices attended
However, the explanatory circular also stressed that the tax commissioner can obtain the information from the subscriber related to the Internet protocol in relation to any investigation or investigation in cases of fiscal fraud of any Internet service provider, telecommunications companies and the Pakistan Telecommunication Authority (PTA).
The FBR also said that sufficient safeguards have been introduced and multiple approvals are required in the research stage, as well as in the research stage to avoid misuse of prosecution provisions.
The FBR has also altered the mechanisms that had been defined to use artificial intelligence in order to identify tax evasion authorizing its officers to reduce the amount of sales of sales taxes. The FBR had taken the authority to set a certain entry tax adjustment limit based on compliance risk management (CRM).
The FBR said that now the “restrictions and input conditions will not be altered without a significant consultation with the commercial and commercial representatives related to the sector for which this action is intended.”
The explanation implies that if the FBR has any questions about the attempt to evade taxes when claiming higher reimbursements, it would first consult with chambers before making any decision.
Last month, the FBR had given almost 11,000 thrust warnings on sales tax anomalies that were identified through the CRM system.
The FBR also explained its execution powers against people difficult to tax and promote the economy documentation. He added that these measures include bar in the operation of bank accounts, bar in the transfer of immovable properties, sealing commercial premises, seizure of immovable properties and appointing a receiver.
“However, these application measures will be carried out in accordance with natural principles of justice and sequentially to avoid undue difficulties,” the FBR explained.
In addition, he declared that before taking any extreme measure, such as freezing bank accounts or commercial facilities, there will be a public audience notice and a hearing will be held by an interested representative of the Chamber of Commerce and Commerce and the internal income officer.
Such decisions will also be made public by placing on the website and FBR newspapers, he added.
