Unregistered distributors ‘CNIC condition likely to encourage tax evasion’

KARACHI: The condition imposed through Finance Act 2022 to collect CNIC from unregistered distributors by manufacturers and importers is likely to encourage tax evasion.

According to tax consultant Munawwar H Manekia, the government had retained the condition of CNIC/NTN for the manufacturer and importers, to the extent of the sales made to unregistered distributors for documentation of economy and for the purpose; the amendment was made in the section 23 sub section 1 clause (b) of the Sales Tax Act 1990 through Finance Act 2022.

He feared that the condition imposed through Finance Act 2022 to collect CNIC from unregistered distributors by manufacturers and importers may encourage tax evasion.

Replying to a question, he said the manufacturer and importers could easily avoid the said condition and could sell the goods to the unregistered distributors without obtaining CNIC/NTN with impunity, due to the ambiguous definition of unregistered distributors which is not covered in the Sales Tax Act 1990.

Copyright Business Recorder, 2022