Pakistan’s President, Dr. Arif Alvi, has asked the Federal Board of Revenue (FBR) to bring into the tax net unregistered sugar wholesalers, dealers, or distributors who acquire large amounts of sugar from sugar mills in order to extend the tax base.
Despite massive monetary transactions and the availability of their data with the FBR, these unregistered sugar importers usually stayed outside the tax net, dodging the primary national obligation of paying taxes, according to Dr. Alvi.
The President issued these directives while deciding on 25 identical representations filed by the Federal Bureau of Revenue (FBR) challenging the Federal Tax Ombudsman’s (FTO) orders directing FBR to bring unregistered bulk sugar buyers into the tax net in order to improve sales tax collection and report compliance within 90 days.
According to the facts, the FTO had launched an “own motion” probe into the FBR’s inability to bring the country’s unregistered sugar mill customers into the tax net. The FTO discovered that non-National Tax Number (NTN) holders were purchasing large amounts of sugar from sugar mills, and that their data was completely available to the FBR, but that this vast potential for tax collection went unused.
The FTO said in its investigation that the mills delivered considerable quantities of sugar to numerous unregistered purchasers, but the FBR did not pay enough attention to increasing the tax base. It went on to say that this low-hanging fruit had yet to be picked and that unregistered sugar purchasers remained outside the tax net while making large monetary transactions.
Because sugar mills were required to keep records of supplies made during the tax period and issue tax invoices indicating names, addresses, description, quantity, values of goods, CNIC, or NTN of persons to whom the supplies were made under the Sales Tax Act of 1990, unregistered persons were easily identifiable, according to the FTO.