AVN 65.45 Increased By ▲ 0.50 (0.77%)
BAFL 30.65 Decreased By ▼ -0.86 (-2.73%)
BOP 4.83 Increased By ▲ 0.04 (0.84%)
CNERGY 3.72 Decreased By ▼ -0.12 (-3.13%)
DFML 14.26 Decreased By ▼ -0.15 (-1.04%)
DGKC 41.06 Decreased By ▼ -0.54 (-1.3%)
EPCL 46.56 Decreased By ▼ -0.14 (-0.3%)
FCCL 11.35 Increased By ▲ 0.06 (0.53%)
FFL 5.03 Decreased By ▼ -0.02 (-0.4%)
FLYNG 5.78 Decreased By ▼ -0.04 (-0.69%)
GGL 10.28 Decreased By ▼ -0.17 (-1.63%)
HUBC 67.03 Increased By ▲ 1.39 (2.12%)
HUMNL 5.68 Increased By ▲ 0.02 (0.35%)
KAPCO 27.85 Increased By ▲ 0.10 (0.36%)
KEL 2.19 Increased By ▲ 0.04 (1.86%)
LOTCHEM 24.83 Increased By ▲ 0.48 (1.97%)
MLCF 21.37 Decreased By ▼ -0.11 (-0.51%)
NETSOL 84.20 Decreased By ▼ -0.59 (-0.7%)
OGDC 85.94 Decreased By ▼ -1.31 (-1.5%)
PAEL 11.01 Increased By ▲ 0.03 (0.27%)
PIBTL 4.17 Decreased By ▼ -0.05 (-1.18%)
PPL 74.56 Decreased By ▼ -1.14 (-1.51%)
PRL 13.40 Decreased By ▼ -0.25 (-1.83%)
SILK 0.92 Increased By ▲ 0.03 (3.37%)
SNGP 40.44 Decreased By ▼ -0.89 (-2.15%)
TELE 5.86 Increased By ▲ 0.01 (0.17%)
TPLP 15.42 Decreased By ▼ -0.22 (-1.41%)
TRG 111.63 Decreased By ▼ -0.07 (-0.06%)
UNITY 13.76 Decreased By ▼ -0.22 (-1.57%)
WTL 1.14 Decreased By ▼ -0.02 (-1.72%)
BR100 4,037 Decreased By -26.9 (-0.66%)
BR30 14,412 Decreased By -56.6 (-0.39%)
KSE100 40,471 Decreased By -262.4 (-0.64%)
KSE30 15,163 Decreased By -67.2 (-0.44%)
Follow us

ISLAMABAD: The Federal Board of Revenue (FBR) Tuesday did not extend the grace period beyond November 30, 2021 for applicability of the “digital mode of payment” by the corporate sector.

Despite serious resistance from the corporate sector to switch to digital mode of payment, the Federal Board of Revenue (FBR) has enforced from December 1, 2021 the ‘impracticable’ and ‘harsh measure’ of making digital payments mandatory for businesses and corporate organisations.

Earlier, the board had extended the deadline for digital payments by the corporate sector up to November 30, 2021.

Till filing of this story, the FBR has not notified any extension.

Shift to digital mode of payments: FPCCI urges FBR to defer policy immediately

However, the FBR can issue an Income Tax Circular on Wednesday (Dec 1) for further extension from the same day.

The business community and the corporate sector was anxiously waiting for another extension for digital payments by the corporate sector beyond December 31st, 2021; however, no Income Tax Circular was issued by the FBR on the extension in deadline stipulated under section 21(Ia) of the Income Tax Ordinance, 2001.

The business community has repeatedly asked the FBR to allow conventional modes of payments along with the mandatory condition of “digital mode of payment” for companies for at least a year.

Digital mode of payments: FBR examining proposal to further extend deadline

It is apprehended that the security of post-dated cheques, used as a means to ensure payments due against sales on credit, would not be available after switching over to the digital mode of payments.

The FBR had allowed the corporate taxpayers a grace period to switch over to the digital mode of payments w.e.f. December 1, 2021 under the Tax Laws (3rd Amendment) Ordinance, 2021.

Keeping in view practical difficulties of the corporate sector, the FBR has the authority to extend the grace period, which expired on November 30th.

The business community has also strongly recommended to the FBR to immediately defer policy of switching over to the digital mode of payments for four months, as it is not possible for the business community to adopt it from December 1, 2021.

Tax experts said that the condition was remarkably in contradiction with other modes of payment through banking channels, which was historically remained in practice and was widely accepted under the provisions of the Income Tax Ordinance, 2001.

Digitizing tax

The law of “digital mode of payment” was surely going to hamper the business activities as it did not cater to the situation and solution of such transactions and added that presently, the businesses, including but not limited to Port Terminal Operators and Shipping Lines, were unaware and were not ready for this “digital mode of payment”.

They said that the “digital mode of payment” was likely to affect the business transactions in the cases where petty cash payments, in aggregate exceed millions of rupees, which cannot be made digitally.

Copyright Business Recorder, 2021

An update: The FBR revised the deadline to December 31, 2021.

Read the follow-up story here.


Comments are closed.

Effective from today: Unfazed FBR makes digital mode of payments mandatory

At least five injured in explosion near Quetta Police Lines

PM vows ‘zero tolerance’ to terrorism

Pakistan expresses unflinching support for Kashmiris on Solidarity Day

Foreign authorities seeking properties/bank accounts info: FBR won’t intimate concerned taxpayer about request

Dar chairs meeting on role of PDFL, SOEs

WB board to consider $78m ‘digital economy’ project next month

PM directs PD to recover Rs1.13bn royalty amount from 2 oil, gas cos

Section 144 imposed in Peshawar

Imran talks of ‘jail bharo’ movement soon

Pakistan to appeal to Taliban leader over mosque bombing