FBR considers invoicing system for tax compliance by hospitals

ISLAMABAD: The Federal Board of Revenue (FBR) is considering a modern technology to ensure compliance by private hospitals and medical centres as they have been found to be paying less than what is due on them as taxes, its chairman said on Saturday.

FBR Chairman Shabbar Zaidi said tax collection from private hospitals and medical centres is “very disproportionate to charges recovered from patients”.

“FBR is seriously considering to install point of sales invoicing system in all big private hospitals and medical centres,” Zaidi said in a tweet.

The proposed system was not further explained. It would appear to work as a machine connected to the central system of the apex tax authority to feed transactions on a real-time basis, much like point-of-sales devices used for digital financial transactions.

FBR chairman didn’t mention the timeline for implementing the system. But, he said a campaign about the system would begin “very soon”.

Private hospitals and medical practitioners are among the list of potential taxpayers that have come on the radar of tax authorities struggling to meet ambitious revenue target for the current fiscal year of 2019/20, which was set at Rs5.5 trillion, up Rs1.7 trillion over the actual collection last fiscal year.

FBR is already sending notices to leading hospitals for acquiring details of surgeons and physicians as it found most of them were not filing their annual returns. Its estimates showed that the Pakistan Medical and Dental Council has 68,000 registered doctors and of which only 6,500 are filing annual income tax returns. Overall, the number of filers is low in the country. Only 2.5 million returns were filed for the tax year 2018.

FBR chairman further said the tax authorities would not hold sellers responsible for misreporting of identity by buyers with regards to computerised national identity cards (CNIC). The government is about to implement a condition for sellers to take CNIC proof of buyers with Rs50,000 or above buying order.

“FBR has issued circulars in the matter of good faith with respect to CNIC requirement,” Zaidi said. “It is now more than clear that no adverse action will (be) undertaken against sellers acting in good faith. Now all misapprehension, misperception on this matter are finished.”

In a next thread, FBR chief warned of ‘serious’ action against businessmen found involved in flouting their tax obligations. He said this in relation to a Faisalabad-based tax department action against individuals involved in fake and flying invoices in sales tax.

“Criminal proceedings have been initiated (against them),” Zaidi said. “It is categorically state(d) that very very serious actions will be undertaken against such persons.”