FBR Affidavit Requirement for Sales Tax Returns – Temporary Relief Announced
The Federal Board of Revenue (FBR) recently introduced a new affidavit requirement to be submitted with monthly sales tax returns, which has sparked concerns across various industries and trade bodies. This requirement places significant responsibility on authorized representative and CFOs of the companies to verify the accuracy of business transactions within the entire supply chain—an obligation seen by many as unreasonable and beyond the taxpayer’s control.
Temporary Relief Communicated by FBR
In a press release on October 17, 2024, the FBR acknowledged the concerns raised by trade bodies, including the Federation of Pakistan Chambers of Commerce and Industry (FPCCI). As a result, the FBR has announced temporary relief:
- The affidavit requirement will not apply to the sales tax return for the September 2024 tax period, which is due in October 2024.
- Stakeholders are invited to submit alternative proposals by October 31, 2024, to address fraudulent practices in tax filings.
- The FBR may modify the affidavit’s requirements based on valid concerns from stakeholders.
This temporary relief comes as a response to widespread criticism that the affidavit unfairly burdens authorized representative/CFOs/taxpayers, exposing them to serious legal risks and penalties under the Sales Tax Act, 1990, for any misrepresentations—even those beyond their direct control.
Probable Implementation on IRIS Portal Currently, the IRIS system has been down for several hours, suggesting that the temporary relief may be in the process of being implemented on the portal. The affidavit condition is likely being removed from the submission process for the September 2024 return.
Legal Considerations for Businesses
Many businesses had already planned to challenge the affidavit in court due to its potential legal and operational risks. However, given the temporary relief and the possibility of modifications by the FBR, businesses may want to hold off on contesting the affidavit for now. As the FBR is open to discussions and potential changes, it may be wise for businesses to wait and see how the situation develops before spending resources on a legal challenge.
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October 17, 2024
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Tax Consultant (Direct $ Indirect Taxes)
4 个月Such an affidavit is not a complete solution to the problem which the FBR wants to curtail.
Senior Manager - Taxation
4 个月There must also be dissemination of information on part of the FBR that how successful they have been at their own, in terms of STGO issued back in September 2023 whereby SOPs defined to curb the menace of fake and flying invoices. How much they have boosted the national exchequer through recoveries made so far from the persons so involved and targeted by the FBR?
HSE Officer
4 个月There should be some relief in this matter. Already many stakeholders are facing brutal troubles in running their businesses.