In a First FBR to Impose Hefty Fines for Sales Tax Evasion

The Chairman of the Federal Board of Revenue (FBR) has stated that it imposes hefty fines and even potential imprisonment on sales tax evaders. Evaders can face initial fine of Rs 5 lac and goes on to increase up to Rs 2.5 million with repeated evasion attempts.

He revealed this in a meeting of the Senate Standing Committee on Finance. The Committee is meeting regularly to review back to back entire budget proposals.

The FBR officials clarified that a first-time evader will be fined Rs. 500,000, and if the evader is caught a second time, they will be fined Rs. 1 million.

A third evasion will result in a maximum fine will be Rs. 1.5 million, and if evasion is discovered after the third time, the resulting fine will be Rs. 250,000 with six-month imprisonment.

Senator Farooq Naek suggested that if the evader has sold their business, they should not be imprisoned. He added that if the fine is not paid, a case should be filed against the evader. If their business closes, it is tantamount to their “financial death”, he remarked.

The FBR revealed that the point of sale (POS) system lacks a monitoring system, and per the standard procedure, when someone makes a purchase, the receipt is registered in the FBR Prize Scheme. However, some people have tampered with the machines, which then do not reveal the real cell, the FBR Chairman revealed.

The committee suggested that the FBR should have a system to locate the original cell.

Some delegates also complained that they had booked containers prior to the ban on imports, which they are now unable to collect. In response, Senator Saleem Mandviwala directed the FBR to resolve the importers’ issues.