Suggestions made to address POS system issues

PESHAWAR: Suggestions were made at a session arranged here on Monday to address the issues related to the Point of Sale (POS) system introduced by the Federal Board of Revenue (FBR) to strengthen the exchequer.

A finance and tax analyst, Muhammad Umair Zeb, was the main speaker who explained in detail the POS system by mentioning its features and making proposals which, he said, were needed to allay fears of the business community.

He said the FBR had noticed that over 153,000 invoices were verified by customers who had shopped from outlets integrated with the FBR POS system as against 45,000 in December when the campaign was launched.

Likewise, he added, around 37 million invoices were issued by Tier-1 retailers, which were integrated with the FBR POS System in January as compared to 33 million in December 2021, registering a steady growth of four million.

Umair Zeb said the number of customers had jumped from 10,000 to 27,000 within one month who successfully verified their own invoices.He termed it a phenomenal increase in public participation and expected that it was likely to grow with every passing day.

The expert admitted that operational and system issues were there as far as POS was concerned.He said that everything should not be looked at from the lens of revenues, adding the risks to the system should not be ignored.

The finance and tax analyst said fears of the business community that the FBR would ask them questions about their past incomes if they started integrating into the POS retailing system were surfacing and that could affect the government’s larger goals.

Umair Zeb said the annual business turnover of the retail sector in the country was nearly Rs 20 trillion.Only 20 per cent of this huge sector is visible to the FBR for tax compliance while the remaining 80 per cent continues to remain out of the tax net, he pointed out.

The expert said it was noted that the big retailers had been collecting Sales Tax from the customers at the POS but the majority would fail to deposit the collected tax into the exchequer.“This resulted in massive revenue loss worth billions to the state,” added Umair Zaib who is a member of the Tax Bar.

He said the tax authorities were facing resistance despite the fact that the whole idea of integrating retailers through the digital system was to not only document the value chain for better tax assessment and collection but also to bring cash flow efficiency into the system.

The expert said the POS system should be future-looking with the aim to document the economy but with the willingness of the market players to have better efficacy.

He believed businesses were shying away and discounting the possible prospective benefits fearing retrospective application of the law.The expert said providing relief to retailers and distributors with regard to past transactions would be a better strategy for documenting future transactions.

He was all-praise of a prize scheme worth Rs53 million to be disbursed to 1007 lucky winners through a transparent computerized ballot to be held on the 15th of every month at the FBR Headquarters, Islamabad.

This is truly an unprecedented example of involving citizens in tax compliance and raising their awareness about their national responsibility to not pay due to tax but safeguard the same from being stolen on its way to the exchequer, he concluded.