Annual Biometric Verification Now Required for Sales Tax in Pakistan. The Federal Board of Revenue (FBR) Pakistan has recently rolled out an advisory for all sales registered businesses to go for Biometric verification once every year. This was not so mandatory in the recent past. The verification was previously to be done only during the registration period but has since been amended to every July with the cut-off date spanning up to July 31 every year.
However, for the year 2024, the cut-off has been moved to September 30. This new measure is one of the components in the FBR’s programs to enhance tax compliance and ensure transparency in all undertakings.
Key Requirements of the Biometric Verification Process
Annual Verification: Businesses registered for sales tax, however, need to undergo biometric verification every year now, and such exercise is conducted at e-sahulat centers within Pakistan.
Verification Timeline: Timeline for the exercise has been given up to July 31 each and every year; for year 2024, the date has been shifted to September 30.
Initial and Ongoing Verification
- Only once pre-registered verification identification where it is taken at a NADRA Center.
- Pre-verification occurs during the process of registration.
- Post-verification takes place once a year, every July.
Purpose and Benefits of Biometric Authentication
The FBR has introduced this authentication procedure for the following reasons:
- To reduce fake bills that are used in tax evasion
- Ensure effective tax collection, including proper identification of firms manipulating the supply chain
- Increase the transparency and accountability of businesses and bring fair play for compliant businesses.
Digital Transformation in the Authentication Procedure
It also aims to bring ease with the FBR working hard to digitalize the process of verification by:
Development of Mobile App for Verification: The FBR would develop a mobile application. Using this, taxpayers can do biometric verification sitting at home and save themselves from any trouble in case they happen to be staying outside Pakistan.
Alternative Means of Biometric Verification: FBR is looking for alternative means to help citizens facing issues of fingerprinting because of old age or due to some physical condition.
Learn more: Common Income Tax Return Mistakes to Avoid in Pakistan
Non-Resident Exempted from Biometric Verification
With respect to various situations like non-domicile and physical incapacitation, FBR has launched an online process of exclusion for such individuals who are incapable of getting biometric authentication. This is very simple and can be applied online through the IRIS Portal of FBR.
To apply online follow the steps:
- Open your account on IRIS Portal.
- You will reach the specific area. Now file an application on the IRIS Portal with an exemption to biometric authentication.
- Attach supporting documents such as a passport for non-residents or a medical certificate for senior citizens.
- The RTO will then assess the application. The taxpayer will then be exempted from biometric verification if his application will be approved.
Advantages of Exemption
This online exemption process makes compliance easier for the concerned persons to perform their tax-related activities without creating any hassle.
Other Requirements for Registration of Sales Tax
There are also new requirements at the time of registration:
Submission of Balance Sheet: For businesses, submission of the balance sheet will be made at the time of sales tax registration.
Wider Impact and Benefits
These are measures that primarily reduce fraudulent activities in the tax system. Some benefits include the following:
- More level playing field for legitimate businesses.
- Improved Tax Collection: Government can collect taxes from a clear identification of businesses avoiding payment.
- These biometric and digital verification initiatives mark giant leaps for FBR on the way to an efficient, transparent, and inclusive tax system for Pakistan.
Conclusion
Sales tax-registered business concerns must understand the new rules for business in Pakistan. Filing tax returns may become problems if annual biometric verification is not done, in which case FBR has expected these measures would work to create a fair and controlled business environment while diminishing tax evasion and responsibility on the marketplace. These requirements ensure conformity and serve the FBR to pursue a more responsive and easier tax system for all people.
