The Federal Board of Revenue (FBR) has officially made ‘digital mode of payments by corporate sector’ mandatory after it didn’t extend the grace period beyond 30 November 2021.
Despite stiff opposition from the corporate sector, the tax machinery has made digital payments mandatory for enterprises and corporate organizations starting from 1 December 2021.
Th FBR had already extended the deadline for corporate digital payments till 30 November 2021. The FBR has not issued any extensions again. The corporate sector was waiting with bated breath for another extension of the deadline for digital payments beyond 31 December 2021. However, no Income Tax Circular was issued regarding the extension of the deadline stipulated under section 21(Ia) of the Income Tax Ordinance, 2001.
Moreover, under the Tax Laws (3rd Amendment) Ordinance, 2021, the FBR had given corporate taxpayers a grace period to migrate to the digital form of payment beginning 1 December 2021. The process has begun to say the least, but after converting to the digital mode of payment, taxpayers fear that the security of post-dated cheques, which are used to assure payments due against purchases on credit, will be lost.
All things considered, the business community has strongly suggested the FBR suspend the new policy for four months, as the business community will not be able to embrace it by 1 December 2021.
Their argument revolves around a certain condition which, according to prominent experts of the game, is strikingly in contrast to other ways of payment through banking channels, which had long been in use and were widely accepted under the rules of the Income Tax Ordinance, 2001.