KARACHI: President Karachi Chamber of Commerce and Industry (KCCI) Muhammad Jawed Bilwani, while vehemently condemning reinstatement of the requirement to file an affidavit with sales tax returns, demanded that the authorities must suspend the affidavit requirement immediately until comprehensive consultations are conducted and effective alternative measures are established.

According to Karachi Chamber of Commerce and Industry, the Federal Board of Revenue (FBR) had previously withdrawn the burdensome affidavit requirement for September 2024 in response to KCCI’s request. This decision was officially communicated through a press release, which highlighted that: a) Filing an affidavit will not be necessary for returns for the tax period of September 2024, due in October 2024; b) FBR will actively solicit alternative proposals from stakeholders until October 31 to address the serious issue of falsified sales tax returns; c) The Board will consider modifying the affidavit requirements based on legitimate stakeholder concerns.

Muhammad Jawed Bilwani expressed that no consultations with stakeholders regarding this matter have occurred, nor have any viable alternative solutions been explored. He emphasized that the business community is already facing immense pressures, and this ill-conceived requirement exacerbates their challenges, contributing to unnecessary hassles and an environment of intimidation.

Bilwani highlighted the significant challenges associated with the obligation to file this affidavit. Taxpayers and their employees, including CFOs, cannot guarantee or assure tax credits that may arise from fraudulent or fictitious invoices linked to their suppliers and subsequent tiers in the supply chain. He pointed out that the ability to verify suppliers’ registration status as active taxpayers is limited to what is available on the FBR’s website. With FBR possessing comprehensive powers such as auditing, verification, and investigation to ensure tax compliance, Bilwani argued that it is unreasonable to expect individual taxpayers, who lack these capabilities, to shoulder the responsibility for issues that FBR must address.

He further stated that FBR’s move to compel Chief Financial Officers (CFOs) to submit an affidavit along with sales tax returns for the tax period commencing in September 2024 places undue pressure on filers. This requirement demands verification of the accuracy of submitted returns while ominously threatening severe legal repercussions, including potential arrest under Section 37(A) and imprisonment for up to ten years as outlined in Section 33(13) of the Sales Tax Act of 1990. He urged the FBR not to involve filers in assuring transparency in the entire supply chain, as it is neither logical nor legal, especially for matters that are already sub-judice at different legal forums.