The Federal Board of Revenue (FBR) has taken a significant step in its commitment to digital advancements by operationalizing the crucial post of Member (Digital Initiatives). This development marks a strategic move toward harnessing technology to enhance tax collection and reporting processes in Pakistan.
In an official notification released by the FBR on Monday, it was announced that Mir Badshah Khan Wazir, a seasoned BS-21 officer of the Inland Revenue Service, presently serving as a Member (IR-Operations) at the Federal Board of Revenue (Hq) in Islamabad, has been trusted with the responsibility of overseeing the post of Member (Digital Initiatives), Federal Board of Revenue (Hq), Islamabad, during the leave period of Karamatullah Khan Chaudhry (IRS/BS-21).
One of the key initiatives under the Directorate General of Digital Invoicing and Analysis (DGDIA) is the integration of the entire sales tax supply chain, which includes manufacturers, dealers, distributors, wholesalers, and retailers. The Director General of the Directorate-General for Digital Invoicing and Analysis will directly report to the Chairman of the FBR through the Member (IR-Operations).
Furthermore, the proposed Synchronized Withholding Agents System will facilitate the integration of the sales tax supply chain and withholding agents. In light of these developments, the FBR is set to provide incentives to withholding agents and the entire supply chain, encouraging them to report their sales and withholding data online through the FBR’s new system.
The new system will enable the seamless connection of sales data from manufacturers, dealers, distributors, wholesalers, and retailers with the FBR’s centralized system. This will result in the monthly availability of sales tax information and payments, making evasion of sales tax virtually impossible.
In line with this digital transformation, the FBR is expected to relax the condition of monthly filing of sales tax returns and audits for those entities integrated with the DG Digital Invoicing and Analysis system. This will lead to concessions provided to the entire supply chain, as the FBR’s system will generate monthly sales tax returns for the relevant categories, seamlessly integrated with the Directorate-General for Digital Invoicing and Analysis.
Furthermore, the FBR is contemplating the possibility of exempting manufacturers, dealers, distributors, wholesalers, and retailers integrated with the FBR’s digital invoicing system from audits. These incentives aim to streamline tax reporting, reduce the burden of compliance, and improve the efficiency of the tax collection process.
In addition to these initiatives, the point-of-sale system under the FBR will also fall under the purview of the Directorate-General for Digital Invoicing and Analysis. This system will automatically feed data into the FBR’s database, obviating the need for monthly sales tax returns and audits.
The establishment of the Directorate-General for Digital Invoicing and Analysis, as provided in the Finance Act, 2021, underscores the FBR’s commitment to embracing technological solutions to enhance tax administration. With a dedicated team and a clear vision, the FBR is willing to leverage digital innovations to revolutionize the tax landscape in Pakistan.
