Customers of large retailers must pay Re1 by invoice to FBR – Journal

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ISLAMABAD: Shortly after assuming the office of President of the Federal Revenue Council, Dr Ashfaq Ahmed decided that the tax mechanism would collect Re1 per invoice issued to customers of large retailers connected to the office’s electronic system.

News of the new tax circulated on social media and sparked criticism of the FBR chairman for burdening clients with yet another indirect tax instead of taxing the actual income of tax evaders.

The issue prompted the RBF to provide clarification. He said the service tax rate was not 1% but Re1 per invoice, regardless of the amount.

Ashfaq Ahmed and the spokesperson for the FBR could not be contacted despite the attempts.

At the post-budget press conference, Finance Minister Shaukat Tarin announced that prizes would be awarded to customers who requested computerized invoices through a computerized raffle. However, he did not mention that the money for the prizes would be generated by a new form of tax to be imposed on customers.

The money collected will be used to reward customers who demand computerized invoices.

Through the use of technology, approximately 10,000 points of sale (POS) were integrated into the RBF’s electronic real-time sales reporting system in fiscal year 21. However, the RBF had assured the Monetary Fund international to reach 20,000 POS, which was largely missed.

According to the statement of the Minister of Finance, the RBF will increase the number of outlets to at least 60,000 in FY22 and will offer prices of 100 million rupees per month and increase this amount to 1 billion rupees. per month to encourage customers to demand computerized invoices.

Using this model 20 years ago, Mr Tarin said, he had increased the deposits of Habib Bank Limited from a few million per month to 40 billion rupees, adding that Turkey had also successfully used the same model. At no time did the finance minister say his government would impose a tax on customers to raise money for the prize.

Last month, the FBR announced that the computerized prize draw for customers of Tier 1 integrated retailers would take place every month from August 2021. The FBR has already published procedures for the pricing system via an SR0.

An RBF official said parliament had already empowered the RBF to impose taxes. When asked if the RBF could impose a tax on services, the official replied that it was not a tax on services. Currently, provinces can impose a sales tax on services while the federal government can impose a sales tax on products.

An official announcement from the RBF indicated that the nominal “service charge” at the rate of Re1 per invoice, regardless of its denomination, would be levied under section 76 of the Sales Tax Act 1990.

He further stated that the money raised would be used to promote the onboarding of all Level 1 retailers, launch an advertising campaign and fund a special pricing program for customers who have duly verified their invoices to determine validity. and the authenticity of invoices issued by level 1 retailers.

Posted in Dawn, le 5 September 2021


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