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ISLAMABAD: The government through Finance Bill 2022 has withdrawn the condition to provide information of the Computerized National Identity Card numbers or National Tax Numbers (NTNs) on supplies to unregistered persons.

Explaining the Finance Bill 2022, the renowned expert, Arshad Shehzad, informed that the federal government in this Finance Bill has removed the condition of providing CNIC or NTN of the unregistered person through a proposed amendment brought under Section 23 of the Sales Tax Act, 1990 read with section 8(1)m of the Act.

It is important to note that restriction and disallowance of correspondence amount of input tax in case of not providing the CNIC or NTN are also lifted from the omission of clause m of section 8(1) of the Act.

Shehzad said that this is one of the major demands of the registered business to remove this condition.

According to the business community, it was not practicable for them to get the CNIC and the NTN detail from their unregistered customers. The undocumented segment of the trade is far higher than the documented sector and therefore, it was impracticable for the documented sector to play the policing role on behalf of the government.

Recovery of due taxes from unregistered sugar buyers made easy

The rising phenomenon of flying invoice was also apprehended which makes this policy counterproductive.

The documented sector, however, had no reservations if some restrictions were placed directly on undocumented sectors so that they may become costlier and compelled to come under the tax net.

He further said these conditions were brought in the Finance Act, 2019, however, remain unimplemented for quite a long time due to its repudiation by registered taxpayers.

According to Shehzad, it is a major relief to the already registered persons who were unnecessarily been burdened by the stringent legal provision.

In his opinion, the government now needs to adopt a more pragmatic approach to expand the tax net like placing a restriction on industrial and commercial utility connections to un-registered persons, etc, Shehzad concluded.

Copyright Business Recorder, 2022

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