The Federal Board of Revenue has changed the rules related to electronic monitoring of registered businesses. After the amendment in the Sales Tax Rules 2006, the path of action has been opened against business establishments that are not connected to the prescribed monitoring system.
According to the new notification of the FBR, the concerned businesses will have to install the required system from among production monitoring, video surveillance or digital eye systems. It is also necessary to keep this system connected to the FBR’s monitoring network.
An important aspect of the new rules is the procedure for sealing a business. Instead of taking direct action against a business establishment, a report from the concerned officer is required first. The Assistant Commissioner of Inland Revenue or an officer senior to him will present the matter in writing before the Commissioner.
The Commissioner of Inland Revenue will send his report to the Chief Commissioner after enquiring into the matter. Based on this report, the Chief Commissioner will issue a written order to seal the business or not. The entire business establishment or a specific part of it can be closed as per the need.
The FBR has also laid down a clear procedure for businessmen. A copy of the order must be provided to the concerned person before sealing. If the business is sealed, it will not be able to open until the required system is installed and connectivity with the FBR is restored.
A fine will also have to be paid to restart the business. Along with this, the installation of the monitoring system will have to be completed. The FBR technical team will be present during this process to verify that the system is operational.
After the installation of the system is completed, the commissioner will have to issue a certificate within three days. After that, the process of reopening the business place can be taken forward.
The main meaning of this change for consumers and business people is that tax-related monitoring will now be done through a more digital system. Registered businesses will have to pay attention to the status of their monitoring system and connectivity with the FBR.
The notification also clarified that the scope of the rules related to electronic monitoring may be extended to more businesses and manufacturers in the future. Thus, the FBR is maintaining the scope to expand the tax monitoring system to more sectors in a phased manner.
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