ISLAMABAD: The Federal Board of Revenue (FBR) has deferred the condition of submitting an affidavit together with the sales tax return for one month to address exporters’ concerns.

As per the decision, affidavits will not be required for returns filing for the tax period of September to be filed this month. The decision came after the Federation of Pakistan Chambers of Commerce and Industry and other leading exporter associations expressed concerns that the condition has caused hardship for businesses.

The FBR will receive alternative proposals from the stakeholders till Oct 31 to curb the menace of falsified sales tax returns. The FBR may modify the particulars of the affidavit where valid concerns of stakeholders do exist.

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Pakistan Textile Exporters Association Patron-in-Chief Khurram Mukhtar said that the FBR should do away with the requirement of an affidavit from the CFO as exporters do not have access to the multi-tier supply chain. He said exporters can only verify the supplier’s status through the FBR system to check if the supplier is on the Active Taxpayer List. Holding buyers responsible for the entire supply chain is illogical, he said.

Mr Mukhtar said that the government should focus on creating a conducive business environment that increases trade volumes and accordingly enhances tax collection.

“We do not support any wrongdoing and strongly encourage strict compliance with tax policies. However, the government must devise a strategy that restores the business community’s confidence”, he said.

However, the FBR emphasised that no new legal obligation arises out of the “affidavit” and that the registered taxpayers should always be cognizant of the fact that declaration of fake or flying invoices and suppression of sale is a cognisable offence under the sales tax law and all registered persons need to exercise extreme caution while filing returns to avoid pecuniary and criminal liabilities under section 33 of the Sales Tax Act 1990.

Published in Dawn, October 18th, 2024