PTBA urges FBR to ensure transparency on non-filers, POS impact, refund delays

KARACHI: The Pakistan Tax Bar Association (PTBA) has requested detailed updates from the Federal Board of Revenue (FBR) regarding the conversion of non-filers into filers.

In a letter to the FBR, the PTBA highlighted that the tax authority has effectively legitimised the category of non-filers by imposing higher tax deduction rates under various provisions of the Income Tax Ordinance for withholding purposes. The association emphasised that FBR officers already possess substantial information about non-filers, gathered during audits, monitoring of withholding taxes, and further tax payments under the Sales Tax Act, 1990, by taxpayers conducting business with unregistered entities. It urged the FBR to disclose details on how many non-filers have been successfully converted into filers.

The PTBA also pointed out that over two years have passed since the implementation drive of the point of sale (POS) system to document the supply chain. It called on the FBR to publish comprehensive data on the number of POS terminals installed across Pakistan and the resultant tax revenue collected through the real-time invoice mechanism.

Addressing concerns over tax fraud, the PTBA noted media reports highlighting significant amounts of fraudulent refund and input tax claims, along with numerous FIRs lodged against offenders. The association asked the FBR to provide and publish data on these FIRs, including the amounts of tax evaded, the actions taken to apprehend the culprits, and their prosecution outcomes.

The PTBA also expressed concerns about the persistent hardships taxpayers face in securing refunds and adjustments, despite the establishment of specific refund zones by the FBR. It sought statistics on the progress made in processing refunds.

The association further criticised delays in issuing refunds and adjustments despite the availability of management information systems (MIS). It urged the FBR to implement an automated process for issuing refund orders under Section 170 of the Income Tax Ordinance, prioritising cases involving salaried individuals, who represent an already overburdened taxpayer category. The PTBA emphasised that prolonged delays would exacerbate the existing trust deficit between taxpayers and the FBR.

The PTBA also requested updates on the FBR’s plans to monitor withholding taxes using technology, specifically the Synchronised Withholding Administration and Payment System (SWAPS). It stressed the need for technological integration to enhance transparency and efficiency in tax administration.