Zaidi and Tola Trade Barbs Over Condition of CNIC on Sales

Former Federal Board of Revenue (FBR) Chairman Shabbar Zaidi and a leading Karachi-based tax expert Ashfaq Tola Sunday argued on the condition of Computerized National Identity Cards (CNICs) on sales made to the unregistered buyers or purchases.

The issue came to the light after ProPakistani reported that the government is considering withdrawing the said condition of seeking the CNIC of the unregistered buyers in the Budget 2022-23.

In a tweet on Sunday, Shabbar Zaidi said “reports that the new government intends to do away with the condition of CNIC on purchases above Rs. 50,000. This will be a crime against the country. I introduced it & political expediencies delayed implementation. This is the only way to document the economy & stop use of corruption money.”

“The retailers & wholesalers resisting CNIC prescription are agents of crime. I am asking the identification of the buyer not seller. Rs 50,000 may be increased to 500,000. I assure the nation that ultimately it will be done & I will be remembered. Only thieves hide their identity,” Zaidi added in another tweet.

Ashfaq Tola responded “Sir, if you recall, in 2018, I was Chairman Anomaly Committee. All traders associations agreed in writing to implement CNIC in 7 months from July @ 30%, & then increase 10% every subsequent month; you and Hammad Azhar refused. You were adamant about enforcing from Aug 2018.”

Zaidi said in response that “It is not the matter of time. It was not 2018 but 2019. These people will not do and we know the reason. But I can assure that it will be done. If this govt deletes the law it will be wrong,” he added.

To broaden the tax base, the condition of CNIC was introduced in Finance Act 2019, since persons involved in the furtherance of taxable activity need to be captured through such measures. However, in order to ease compliance costs, the threshold was enhanced from Rs. 50,000 to Rs. 100,000.

The FBR has already expanded the scope of disallowance of input tax on account of the non-mentioning of the CNIC of the buyer by the seller on the invoice required under Section 23 of the Sales Tax Act, 1990.

The condition of the CNIC from the unregistered buyers was made applicable from February 1, 2020, onwards, but not practically enforced by the FBR’s field formations in the past.

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