FBR suspends affidavit requirement for September sales tax returns

The Federal Board of Revenue (FBR) has announced that Chief Financial Officers (CFOs) and authorized representatives of companies will not need to file an affidavit confirming the accuracy of their sales tax returns for September 2024, which are due in October 2024.

Initially, the FBR required these affidavits to ensure compliance with the Sales Tax Act of 1990. However, many trade bodies, including the Federation of Pakistan Chambers of Commerce & Industry (FPCCI), reported that this requirement was causing difficulties.

The FBR explained that the affidavit was meant to remind CFOs and authorized representatives of their legal responsibilities and the potential criminal consequences of submitting false information.

However, the FBR has decided to suspend the affidavit requirement for the September 2024 tax period to address the concerns of various stakeholders.

The FBR will accept alternative proposals from stakeholders until October 31, 2024, to find better ways to prevent false sales tax returns. The Board may adjust the affidavit requirements if valid concerns are raised.

A recent analysis by the FBR revealed significant fraudulent practices in sales tax returns filed by some businesses. The discrepancies found suggest that CFOs and authorized representatives are not exercising due diligence. The FBR emphasized that submitting fake invoices or hiding sales is a serious offense under the sales tax law, and all registered taxpayers must be careful to avoid legal and financial penalties.