The Karachi Chamber of Commerce and Industry (KCCI) President, Muhammad Javed Balwani, has strongly criticized the Federal Board of Revenue’s (FBR) decision to reinstate an affidavit submission requirement with sales tax returns.
Balwani in his statement called for immediate suspension of the affidavit requirement, urging FBR to consult thoroughly with stakeholders and find a more effective solution.
He stressed that FBR had previously agreed, in response to KCCI’s request, and temporarily withdraw the affidavit requirement for September 2024.
As per Balwani statement, the FBR spokesperson assured that the filing of an affidavit will not be needed for returns for the tax period of September 2024, which are due in October 2024, adding that the revenue board will actively solicit alternative proposals from stakeholders until October 31 to address the serious issue of falsified sales tax returns, furthermore, the board will consider modifying the affidavit requirements in light of legitimate stakeholder concerns.
Balwani argued that the absence of stakeholder engagement and viable alternatives placed undue strain on the business community, creating an atmosphere of intimidation.
“No consultations with stakeholders regarding this matter have occurred, nor have any viable alternative solutions been explored”, Bilwani said.
According to him, the burden of verifying tax credits arising from potential supplier fraud is unreasonable. Taxpayers and CFOs lack the resources and authority to ensure the authenticity of their suppliers’ tax status and should not bear this responsibility.
Balwani emphasized that FBR, equipped with audit and investigation powers, should handle these verification tasks.
Furthermore, he voiced concerns about potential legal ramifications for filers under sections 37(A) and 33(13) of the Sales Tax Act, 1990, which could lead to imprisonment if tax discrepancies arise from unauthenticated sources within the supply chain.
The KCCI president called for FBR to re-evaluate the affidavit policy, noting that transparency enforcement should not fall solely on taxpayers.
About KCCI
Karachi Chamber of Commerce and Industry (KCCI) represents the Business and Industrial Community in the city of Karachi, contributing more than 65 percent revenue to the national exchequer and a city of more than 22 million dwellers. It is the largest Chamber of Pakistan and the Sub-Continent.