LAHORE: The Federal Board of Revenue has made significant amendments to the Sales Tax Rules 2006 to increase digital monitoring in the tax collection system. Under the new rules, action can be taken against registered businesses that are not connected to the prescribed monitoring system.
The notification issued by the FBR has made it mandatory for business centres to install production monitoring, video surveillance or a digital eye system. The aim is to link electronic monitoring of business activities with the tax system.
Under the new procedure, if a registered business is not connected to the FBR monitoring system, the relevant authorities will be able to initiate action against it. If necessary, police assistance can also be sought to seal the business premises.
The authority to take action has not been directly given to an officer. According to the notification, the Assistant Commissioner Inland Revenue or an officer senior to him will first have to submit a written report to the Commissioner. The Commissioner will send his report to the Chief Commissioner after inquiry into the matter.
After this, the Chief Commissioner will issue a written order regarding the sealing of the business or not taking action. Under the rules, the entire business premises or a specific part of it can also be sealed.
The FBR has also prescribed a procedure for the businessman before sealing. A copy of the order will have to be provided to the businessman concerned. The business premises may remain sealed until the required monitoring system is connected to the FBR system.
Merely installing the system will not be enough to reopen the business. The concerned business person will also have to pay the prescribed fine. After this, the installation of the monitoring system will be completed in the presence of the FBR technical team.
After the system is activated, the Commissioner will have to issue a certificate within three days. This process will also establish a regular administrative record for the reactivation of the business.
The scope of the new rules may be extended to more business sectors and manufacturers in the future. This shows that the FBR is moving towards expanding the use of digital systems along with traditional inspections in tax supervision.
The main requirement of the new change for business persons is to install the monitoring system and maintain its active contact with the FBR. The notification has clarified the procedure for action, fines and sealing of the business premises in case of violation.
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