KCCI president urges FBR to reconsider affidavit requirement for sales tax returns

KARACHI: President of the Karachi Chamber of Commerce & Industry (KCCI) Muhammad Jawed Bilwani has urged the Federal Board of Revenue (FBR) to defer the requirement of submitting an affidavit for sales tax returns.

He explained that this condition forces taxpayers to affirm that the information provided is completely accurate and true, even though it is likely that the information is correct to the best of the taxpayer’s knowledge. Consequently, taxpayers risk being penalized for any wrongdoings committed by their vendors.

In a statement, the KCCI president said, “It is a very confusing situation; therefore, the FBR should either inform us with whom we should conduct our purchases or develop standard operating procedures (SOPs) for purchases. Currently, we only check whether the vendor is blacklisted, and if they appear clean, we proceed with the purchase.”

He recalled that top officials of the FBR had previously recommended that the business community check the FBR website before making purchases, a common practice for many years. However, he noted that businesses are now being compelled to submit an affidavit that could be used against them if the vendor engages in tax evasion.

President Bilwani further mentioned that the FBR’s transformation plan hinted at increased audits, which contradicts the finance minister’s claims made in his budget speech, wherein he assured that maximum IT and AI-enabled services would be utilized to eliminate human interaction and transform the existing audit procedure into a fully automated and real-time process.

“More audits mean the appointment of more auditors, which will complicate the procedure further and pave the way for more incidents of corruption,” he said, adding that adopting maximum IT-enabled services would reduce the workforce at the FBR, helping to lower the exorbitantly high expenses of tax collection authorities and ultimately benefiting the economy.

While acknowledging that many aspects of the FBR’s transformation plan are positive, he stressed that several issues and gaps still need to be addressed promptly in consultation with the business community and relevant stakeholders to ensure the plan is flawless.

Referring to a meeting with the chairperson of the FBR at the Customs House in Karachi, the KCCI president expressed hope that the FBR would give due attention to all the issues raised and the suggestions provided for creating a taxation-friendly environment, which is urgently needed to foster an enabling atmosphere for both businesses and the economy.