Islamabad: The Federal Board of Revenue (FBR) has announced a temporary suspension of the requirement for Chief Financial Officers (CFOs) and authorized representatives to submit affidavits affirming the accuracy of sales tax returns for the tax period of September 2024. This decision comes in response to concerns raised by trade bodies, including the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), about the hardships caused by the affidavit requirement.

According to Federal Board of Revenue, the affidavit requirement was initially introduced to ensure that CFOs and authorized representatives exercise due diligence when filing sales tax returns, as significant discrepancies had been detected during a data-driven analysis of returns submitted by major businesses. The Board emphasized that these discrepancies could have been avoided if proper oversight had been conducted by the individuals responsible for filing.

In response to the concerns, the FBR clarified that the affidavit merely reiterates existing legal obligations under the Sales Tax Act, 1990, and was designed to inform individuals of the criminal liabilities they may face if false information is submitted. However, in an effort to work collaboratively with stakeholders, the FBR has taken the following steps:

The requirement for the affidavit will not apply to sales tax returns for the tax period of September 2024, due to be filed in October 2024.

Stakeholders have been invited to submit alternative proposals by October 31 to address issues of falsified sales tax returns.

The FBR may modify the particulars of the affidavit to address valid concerns raised by stakeholders.

The FBR reiterated that no new legal obligations have been introduced through the affidavit and reminded registered taxpayers of the severe penalties associated with filing false returns under section 33 of the Sales Tax Act, 1990. It urged all taxpayers to exercise caution when filing sales tax returns to avoid criminal and financial liabilities.