The Federal Board of Revenue (FBR) has intensified its oversight of the solar energy sector by deploying tax officials at the premises of leading solar companies in the country to monitor sales and prevent revenue leakage under Section 40-B of the Sales Tax Act 1990, Business Recorder reported.
The initiative, aimed at ensuring compliance within Pakistan’s expanding renewable energy sector, has seen approval for the Chief Commissioner Inland Revenue in Karachi to station officers at top solar companies for a period of 30 days, according to an official letter.
According to the news report, the monitoring exercise targets four major solar companies operating in Karachi, with sources indicating that these firms have been engaged in sales suppression to evade sales tax obligations. The FBR aims to verify this and ensure proper tax compliance through this focused effort.
The deployed officers will monitor sales of taxable goods, stock positions, and inventory management at these companies’ premises.
Section 40-B of the Sales Tax Act grants the FBR the authority to station officials at business premises to ensure adherence to tax regulations.
The solar energy sector in Pakistan has seen significant growth as the country seeks to diversify its energy sources to reduce costly energy imports. However, this rapid expansion has raised concerns over potential revenue losses due to non-compliance with tax regulations.
The 30-day monitoring period will allow FBR officials to conduct real-time oversight of business activities and transactions. Sources suggest that the monitoring exercise may be expanded to other high-growth sectors to meet revenue targets after the initial period.
