ISLAMABAD: The Federal Board of Revenue (FBR) has finally decided to document the supply chains of wholesalers, distributors, small, medium and large manufacturers, importers having taxable income, but who have remained unregistered to evade taxes.

According to an order issued by the FBR, here on Thursday, the FBR has issued 13 Terms of References (ToRs) of the “Sub-Committee on Integration of Businesses”.

The mandate of the sub-committee would be to identify wholesalers, distributors, small, medium and large manufacturers, importers, who potentially have taxable income but have not been brought into the tax base of Pakistan and are evading and suppressing taxes and invoices.

The Sub-Committee would also define the potential target market and quantify its size.

It will also develop a Business Plan comprising budget pertaining to project plan, human, IT, and infrastructure resources required to bring the potential target market into the tax base to generate incremental tax revenue.

The sub-committee will also obtain legal and regulatory protection, facilitation, and support of stakeholders in order to achieve the objective in collaboration and support of the FBR. The Business Integration committee will define policy and rules for a licensing framework for the appointment of intermediaries who will coordinate and facilitate the integration of supply chain to capture and report all sales transactions. The committee will define policy and rules for the licensing framework for appointment of intermediaries, who will coordinate and facilitate the integration of supply chain to capture and report all sales transactions.

The sub-committee will also coordinate with various associations and trade bodies to facilitate the integration of supply chains. It will also be controlling, monitoring, and implementation of the supply chain capture integration program in coordination with IRS Operation.

It will also develop a correlation between invoice and E-payments for the purpose of an audit in coordination with necessary stakeholders including but not limited to the State Bank of Pakistan.

As per the TORs, the sub-committee will leverage software to capture the entire supply chain from manufacturing, distributor, wholesaler, retailer and customers to capture transactions, the WHT information, and use the develop database to capture potential taxpayers.

It will also leverage data analytics to capture sales tax demand on the input and output at each stage of supply chain from manufacturing to end consumer, thereby, bringing unregistered distributors and retailers into the tax net.

It will also determine the IT-related resources required in terms of hardware, software, bandwidth, and storage along with the financial cost and timelines of delivery.

It will also develop the organisational structure required to deliver on the above TORs based on the size of the potential target market, physical dispersion of the potential target market, and committed timeline for achieving the TORs.

Develop the costs associated with recruitment, third-party agreements or consultancy arrangements required to acquire the desired human resource, the FBR added.

The sub-committee will be authorised to determine the infrastructure in terms of premises, furniture, equipment, rent, lease, renovation, internal layout-related costs.

Copyright Business Recorder, 2022