- FBR granted enhanced powers to recover sales tax using withholding tax data
- Amendment to Section 11D of the Sales Tax Act, 1990, expands FBR’s enforcement capabilities
- New sub-section targets entities liable to register under clause 25 of section 2 of the Sales Tax Act
- FBR can assess sales tax liability based on value addition if a taxable entity fails to file a return
- Assessment uses purchase data from income tax withholding, especially under section 236G
- Amendment aims to trace sales tax evasion by linking it to income tax withholding data
- FBR can issue recovery notices based on calculated value addition
- Mechanism expected to improve documentation and close loopholes for unregistered businesses
- Part of a broader strategy to improve indirect tax collection and reduce reliance on voluntary compliance
- Expected to significantly raise sales tax revenue in fiscal year 2025–26, especially in wholesale and distribution sectors
Source: pkrevenue.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
