Iftikhar Ahmed Sheikh, President of the Karachi Chamber of Commerce & Industry (KCCI), has voiced concerns regarding the recent amendments introduced in Sales Tax Rules 2006 through SRO.350(I)/2024, emphasizing that these changes will adversely affect compliant entities without taking into account their specific business nature and sectors.
In a letter addressed to Chairman Federal Board of Revenue, Malik Amjed Zubair Tiwana, President KCCI urged the FBR to reconsider the amendments, highlighting several points of contention. Sheikh pointed out that Rule 5, Sub-Rule (2) mandates registered individuals, AOPs, and companies with sole shareholders to submit balance sheets reflecting business capital alongside corresponding bank assets, despite such entities already providing this information to the FBR during Income Tax Returns filing.
Moreover, Sheikh criticized the requirement in Clause C sub-rule (4) for owners of these entities to undergo biometric verification at NADRA Sahulat centers, labeling it as counterproductive to the ease of doing business. Additionally, Sheikh raised concerns about the amendment in Rule 18, Sub-Rule (1), which restricts sales volume to a maximum of 5 times the business capital.
He argued that this rule overlooks business realities, particularly for commercial importers and exporters who often operate on extended credit terms. He suggested that instead of imposing arbitrary restrictions, efforts should focus on rationalizing Further Tax rates and reducing withholding tax (WHT) rates on local supplies to discourage tax evasion and mitigate the issuance of fake invoices. President Karachi Chamber of Commerce & Industry (KCCI) emphasized that while the aim of the amendments was to curb fraudulent practices, the measures introduced could be counterproductive.
He proposed revisiting the approach to ensure a conducive business environment and sustainable revenue generation for the FBR.
