THE Federal Board of Revenue (FBR) has announced new amendments to the income tax rules, focusing on the mandatory integration of electronic invoicing systems for various business sectors.
According to a notification, businesses must comply with the new system within a specified period, after which penalties will be imposed for non-compliance or violations. The proposed changes envisage that all registered businesses will be required to install point-of-sale (POS) systems and integrate them with the FBR’s centralized system. The decision applies to a wide range of sectors, including hotels, guesthouses, marriage halls and various clubs as well as intercity transport, courier services and cargo operators.
The proposal to integrate a fairly large number of POS with the centralized system of the FBR means the taxman has achieved the capability to handle almost the entire load of business transactions carried out in the country. This is, of course, the result of the comprehensive reforms carried out in the FBR including the much-talked-about end-to-end digitization that is aimed to get the full picture of the tax-related activities. A new chapter on online business integration has been introduced under these amendments, stipulating that all businesses listed in the schedule must link their POS systems and electronic invoicing software with FBR’s system. Every sale will need to be documented with a real-time, verifiable electronic receipt containing a unique FBR invoice number and QR code and all transaction data must be securely transmitted to FBR. Businesses will be required to retain this data for a minimum of six years. To ensure transparency and effectiveness of the system, businesses are required to install integration systems only through licensed companies. If implemented in letter and spirit, the new initiative has the potential to combat tax evasion, increase revenue and foster transparency in business transactions. It can surely help boost revenue collection efforts in a big way avoiding the need to add to the burden of the honest tax-payers. However, much depends on the will and determination of the Government, which has so far not been able to bring retailers into the tax net despite frantic efforts during the last two years.
