FBR may go slow on condition of CNIC

ISLAMABAD: Amid lingering stalemate between FBR and business/trading community over sharing of Computerized National Identity Cards (CNICs), the FBR may continue slowing down to go for all out implementation on CNICs condition till January 1, 2020. The trading/business community had threatened to hold protest, long march on Islamabad from October 7, 2019 but so far, the government refused to succumb to pressure of anyone. Without documentation, the FBR high-ups argued that there should be no expectation that the FBR will reach close to Rs5,503 billion envisaged target under the IMF programme. On front of revenue collection, the FBR faces a negative growth on account of Customs Duty and Income Tax at import stage in ongoing month (September 2019) but efforts are underway to maximise Inland Revenue (IR) collection in shape of Income Tax, General Sales Tax (GST) and Federal Excise Duty (FED). Despite giving sales tax refunds of Rs17 billion, efforts are underway to go close to the IR target of Rs353 billion as major chunk of revenues is expected to be materialised on last day (today) because of filing of returns of income tax and sales tax.

“The FBR may face revenue shortfall in the range of Rs110 to Rs120 billion for first quarter (July-Sept) on September 30, 2019,” official sources confirmed to The News here on Sunday.

On CNIC condition, the FBR high-ups are reluctant to say anything with clarity but it seems that the FBR will not go out for full fledge implementation on CNIC condition on purchases of Rs50,000 from manufacturers in coming quarter (Oct-Dec) period. “We may opt to go all out for CNIC condition with effect from January 1, 2020,” top official sources confirmed on condition of anonymity.

The FBR official said that the tax machinery would undertake detailed analysis in the aftermath of September 30 to ascertain how much taxpayers provided CNIC information accurately. “We may opt for delaying any punitive action till January 1, 2020 but it all depends upon how much taxpayers responded through their sales tax returns,” said the official.

The relaxation given to the business community by the FBR for taking no adverse action under the Income Tax Ordinance 2001 and Sales Tax Act, 1990 against traders on the basis of information emanating from providing of CNICs was going to expire on Monday (today).

The government had taken important decision through Finance Act 2019 by imposing the condition of providing CNIC on supplies to unregistered persons.

The FBR took decision that it would not take any adverse action on provision of CNIC condition till September 30.

Parliament can only withdraw the provision of the CNIC, which is part of the Finance Act 2019. If Parliament amends the Finance Act 2019, the condition of the CNIC could be withdrawn.

Practically, traders and other businesses have refused to provide CNICs of their un-registered buyers, which may result into continuous stalemate on this issue in months ahead.

Traders had announced to start protests from October 7 against the condition of CNIC numbers of unregistered buyers.