Tax ombudsman directs FBR to plug loopholes in POS regime

As per complainant tax was being charged illegally at the POS system

Islamabad: Tax Ombudsman has directed FBR to enforce effective monitoring and enforcement mechanism plugging all loopholes in point of sale (POS) regime.

FTO’s recommendations were made while conducting a complaint lodged against FBR’s negligence and inefficiency in the point of sales.

The complainant pointed out a few postpaid tax transaction receipts which were not verified. Further, in POS the tax was being charged on eatables despite being a non-scheduled item as per price control Act 1977.

Not only the tax was illegally being charged .It was not being paid into government exchequer as well . The complainant believed that it was the prime responsibility of FBR to plug loopholes in tax collection.

The hearing was attended by Chief POS FBR, Chairman PRAL, and Second Secretary IT, FBR and the complainant.

The representatives of FBR/PRAL/RTO stated that system up-gradation is an ongoing process which PRAL is already doing .It’s enforcement is responsibility of field formations  which need to be more vigilant whereas  Secretary POS informed  that the points raised by the complainant regarding postpaid  vs prepaid tax system are a policy issue and cannot be commented upon by FBR.

However, it has been observed that after putting in place a system of postpaid tax, by PRAL, FBR could not train and motivate its field officers to monitor and enforce the system effectively.

FBR’s statement that a procedure for tier 1 retailers had been introduced, without reporting incidents of enforcement of such rules, was mere eyewash, FTO observed.

Mere installation of a system or rolling out defective software was not enough unless effective and efficient monitoring and enforcement follow up was not put in practice.

FBR’s negligence in enforcing the PSO system  was thus obvious. The Federal Tax Ombudsman had further directed FBR to evolve an efficient mechanism in the POS regime; a list of credible authorized vendors for sale/installation of software should be published.

Dr. Jah also recommended that all Chief Commissioners must ensure that the registered and functional QR code must be visible in all the invoices and also directed I&II-R to trace and proceed against TIER 1 retailers who were found involved in tax evasion through non issuance of verifiable tax invoices .


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