SRO 350/(I)/2024: PTBA says concerned at non-consideration of ‘fundamentals’

KARACHI: Pakistan Tax Bar Association (PTBA) has expressed its concern over non-consideration of fundamentals in the recently issued SRO No. 350/(I)/2024.

In a letter sent to the federal finance minister Muhammad Aurangzeb, PTBA said that the Federal Board of Revenue (FBR) recently issued SRO No. 350/(I)/2024 on March 7, to further digitalize tax procedures and enhance compliance. However, the PTBA has reviewed the SRO and highlighted several areas of concern that they believe require prompt action.

The Bar acknowledged the importance of digitalization and appreciated the FBR’s efforts, but they argued that a few fundamental aspects have not been adequately considered in the new SRO. In a letter, the Bar warned that if these issues were not addressed, they could jeopardize economic activity and impact tax revenue collection.

One of the key concerns raised by the PTBA is the requirement for individuals, associations of persons, and companies with a single shareholder or member to file their balance sheets within 30 days. They suggested that this information is already available to the authorities through income tax returns, and the assessing officer can easily access it. They recommended that the FBR should instead issue an electronic notice to the taxpayer if the balance sheet is not available with the return.

Regarding the rule that requires taxpayers with a turnover more than five times their capital to seek permission from the Commissioner through the IRIS system, the PTBA argued that this does not account for various modes of business financing, such as credit facilities, bank loans, advances from suppliers, and personal loans. They suggested that the FBR should acknowledge these financing methods and not penalize taxpayers for increases in turnover that result from such legitimate business activities.

They also addressed the new provision that requires prior approval from the Commissioner for issuing credit notes under sub-rule (3) of rule 30 and recommended that the Commissioner should be required to issue the approval for credit note issuance within 7 days of the request, given the specified sales tax filing deadlines.

Copyright Business Recorder, 2024