ISLAMABAD: Federal Board of Revenue (FBR) Chairman Dr Muhammad Ashfaq Ahmed said Saturday that the FBR will close businesses and retail outlets of the fraudulent retailers, who are collecting sales tax from consumers, but not depositing the same in the national kitty.
Talking to the media at the conclusion of the mega show of the first Computerized Draw on POS prize held at the FBR headquarters here on Saturday, the chairman FBR said that it is a financial crime not to deposit the sales tax collected from customers into the national exchequer.
“We will not allow retailers to commit this financial crime,” the FBR chairman warned retailers.
The FBR held the much-awaited prize draw for the shoppers from POS-integrated Tier-1 retail outlets in the presence of a large gathering at the FBR House.
Dr Muhammad Ashfaq Ahmed added that the FBR has obtained enforcement powers under the Finance (Supplementary) Act, 2022 to take action against retailers involved in non-reporting of sales, as Rs16 trillion to Rs17 trillion sales remain unreported.
Out of the total retail volume of Rs20-Rs22 trillion, the FBR’s visibility is Rs4-5 trillion, whereas, the banking sector has visibility of such sales of Rs5-5.5 trillion. This is compromising the national income accounts and the GDP size of the retail sector vis-a-vis tax paid. The evasion of sales tax by the retailers is also resulting in the evasion of the income tax.
The chairman FBR said that over 3,000 big retailers (Tier-i) are integrated with the FBR’s system.
Despite sales tax being paid by the general public, there is non-reporting of sales to the tune of Rs16 trillion to Rs17 trillion by the retailers.
This reflects the quantum of tax fraud taking place within the retail sector.
The FBR will go after these retailers and document them at any cost.
“We will also recover sales tax from these retailers and deposit the same in the national kitty”, the FBR chairman stated.
The FBR chairman stated that keeping in view the big success of the prize scheme, the government is considering to raise the price money for the first bumper prize in the next lucky draw.
On Saturday, the FBR held the lucky draw and issued the list of lucky 1,007 winners of the first computerized draw of POS prize who were given prizes worth Rs53 million. The FBR will deduct withholding tax at the rate of 40 percent from winners who are non-filers and 20 percent withholding tax who are filers of income tax returns.
The said prize scheme was introduced through the Finance Act-2021, which was followed by the issuance of rules for the prize scheme on 9th August 2021 by the FBR. The denomination of prizes has been set as Rs10,00,000 (1st Prize), Two prizes of Rs500,000, four prizes of Rs250,000, and one thousand prizes of Rs50,000 each. Thus, a total prize amount of Rs53 million will be distributed among the lucky 1,007 winners, every month.
The bumper prize of Rs1 million was announced for Tanver Ahmed having documented receipt of Alkaram Studios. The FBR also announced the names of the lucky winners of two prizes of Rs500,000 and four prizes of Rs250,000.
This lucrative Prize Scheme of the FBR aims to maximise transparency and plug revenue leakage through real-time monitoring of sales.
It also aims to ensure that tax collected from customers at the point of sale is deposited in state exchequer. This will not only force the Tier-1 retailers to expedite the integration of their retail outlets with the FBR POS System but will also encourage the customers to prefer shopping from the POS-integrated retail outlets.
The FBR is expecting a substantial increase in revenue through this innovative initiative as it will reduce tax evasion and minimise concealment of sales by the retailers.
Customers can participate by verifying the receipt of purchases through Tax Asaan Mobile App of the FBR or by sending the invoice number through an SMS on 9966.
The FBR has launched a very aggressive print and electronic media campaign for the awareness of people across the country.
They can also get assistance by following the FBR’s social media handles on Twitter, Facebook, and YouTube or call on FBR Helpline- 111772772.
Copyright Business Recorder, 2022