FBR to Install 500,000 POS Machines to Cull Tax Evasion
The aim of installing a POS machine is to ensure effective tracking and determine the revenue generation of retailers
To cull tax evasion, the Federal Board of Revenue (FBR) has set a target of collecting Rs 100 billion in taxes from the retail sector through POS machines.
For this purpose, the revenue body plans to install as many as 500,000 Points of Sales (POSs) machines at shops, shopping malls, brand outlets, and other business centers including eateries.
So far, 11,000 large stores have incorporated POS machines and the rest are in pipeline.
The target of installing a POS machine is to ensure effective tracking progress and determine the revenue generation through the system after adjustment of input and output taxes.
In this regard, all major stores, shopping malls, brand stores, hotels and restaurants will install this machine locally or by importing it and FBR clarified that no sales tax or duty will be applicable on the import.
FBR has issued special instructions that it will crackdown on big tax evaders in the retail sector, especially those who collect sales tax from the customers but don’t report it to the government.
Read Also
After a Year, Has Investigation of PSX Attack Progressed?
One of the FBR officials told News360 that the annual sales of big retailers are up to Rs 10,000 billion and in comparison, they declare sales of just Rs 700 billion.
The small retailers submit up to Rs 15 billion in taxes to FBR, he added.
Thus, an estimated Rs 93 billion of sales tax is evaded annually which will be recovered in the new budget with the implementation of new measures.
The official said that the retail sector share in the economy is about 20% of the GDP but the volume of income tax is meager.
With new amendments, FBR officials will now have the power to raid various major stores including clothing, footwear, bakeries, hotels, brand franchises, chain stores, and departmental stores.
Moreover, the bank accounts of retailers will be scrutinized and their National Identity Card (NIC) will provide in-depth detail of their expenditures.
FBR will take strict action against the retailers who would not install the POS machines at their stores.
The revenue also issued a statement and directed inland revenue department officials to take action against tax evasion.
