FBR’s new sales tax filing procedure causes delays amid technical challenges

The Federal Board of Revenue (FBR) has introduced a range of changes in the sales tax return filing process, which have significantly slowed down the submission of returns across Pakistan, according to media reports. 

Despite extending the deadlines for the February and March 2025 returns, technical issues continue to plague the new system, causing frustration among taxpayers.

According to sales tax experts, recent updates require taxpayers to submit more detailed technical information, aiming to improve the system’s checks and controls. However, these changes have made the filing process more complex and difficult for ordinary taxpayers and businesses to navigate.

One of the key changes involves the inclusion of an eight-digit H.S. code and the quantity of goods sold in Annex C of the sales tax return. This change is designed to create an electronic system to better track purchases and sales, aiming to tackle the issue of fake invoices and reduce tax leakages. 

However, the increased technical requirements have proven challenging for many taxpayers. Reporting the correct H.S. code demands specialized knowledge, and the fear of penalties for mistakes has led to widespread reluctance in submitting returns.

The FBR has also introduced new annexures for reporting production and stock data. However, these changes were implemented without fully considering their practical application, further complicating the filing process. 

Taxpayers urged the FBR to address these concerns and provide clearer, more practical solutions to ease the compliance burden and prevent further delays in the filing process.