Taxpayers bound to pay duties above Rs1 million online

KARACHI: The government has made it mandatory for taxpayers to pay custom duties exceeding one million rupees only through digital means, the central bank said on Thursday while asking banks to address customers’ complaints related to online tax payments.

The State Bank of Pakistan (SBP) said the Federal Board of Revenue (FBR) has been collecting taxes through alternate delivery channels (ADC) since March 2018 in parallel to the traditional paper based manual system.

“Considering the successful and smooth operations of ADC platform for over 2 years, FBR made it mandatory for corporate tax payers to pay their taxes only through ADC mechanism from 17 August 2020. The other two categories – association of persons and individual tax payers – will also be gradually shifted to ADC mechanism thus completely eliminating the traditional tax collection system,” the SBP said in a statement. “As another step towards digitisation of taxes and duties collections, the FBR and Pakistan Customs decided that effective 20 January 2021, custom duties exceeding Rs1 million will be collected through ADC mechanism only.”

The ADC mechanism lets taxpayers pay taxes through internet/mobile banking, automated teller machines (ATMs) or over-the-counter (OTC) of 16,000 branches of commercial banks across the country. It enabled FBR and government accounting bodies to realise the tax proceeds on almost real time basis and record the transactions in their accounting system electronically, said the SBP.

The SBP said there are still complaints and concerns by the taxpayers about low awareness of banks’ field staff about the ADC particularly the OTC mechanism.

To address the grievances, the SBP asked banks’ branches to have fully functional OTC system integrated with 1Link to collect the taxes and duties. The branch staff should have full understanding of the system and should facilitate the taxpayers in payment of taxes.

As the custom duty is dependent on exchange rate, it changes with the change in exchange rate. There may be cases where the tax payer generates payment slip ID (PSID) on day one and approaches the bank for payment, the next day and thus the amount of duty reflected on the taxpayer’s PSID is different from the one appearing on bank’s terminal. “In such cases if the cheque presented is of lesser amount, the banks shall accept the additional amount in cash or cheque as per the convenience of the taxpayer. Further, in case the cheque amount is greater than the custom duty appearing on the bank’s terminal, the excess amount shall be credited in the tax payer’s account with the bank,” said the SBP. “There have been complaints that the banks’ branches do not accept the cheque drawn on another branch of their bank for payment of taxes and ask the tax payer to visit the branch on which the Cheque is drawn. As all bank branches are online, the tax payer can pay the taxes in any branch of his/her bank. The banks shall ensure that all their branches are accepting the taxes and duties through ADC mechanism and that their customer can pay the tax in any branch of his/her bank.”

The banks are also advised to send SMS or email messages to their clients informing them about the development.