The Federal Board of Revenue (FBR) has recently adjusted its requirements regarding the filing of balance sheets for individuals, associations of persons (A.O.P), and single-member companies already registered with the board. This adjustment, outlined in SRO581, aims to streamline processes and reduce administrative burdens.
In a move to combat tax fraud, the FBR has introduced stricter conditions for new sales tax registrations. These amendments, introduced via SRO 350(I)/2024 on April 7th, 2024, target activities and transactions susceptible to fraudulent practices.
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One notable condition mandates the submission of balance sheets for individuals, partnership firms, or single-member private limited companies seeking fresh registration. Surprisingly, this requirement was also extended to already registered entities falling within a certain class. However, many registered persons were caught unaware of this stipulation, as no prior communication or information session was conducted by the board.
Following the Eid holidays, numerous registered entities faced difficulties when attempting to file their sales tax returns or Annex ‘C,’ as they had not complied with the new requirement. This led to widespread confusion in the trading community. Fortunately, after significant advocacy efforts by tax bars, trade bodies, and business forums, the board has decided to relax this condition and remove the hurdle from electronic filing.
This relaxation is expected to facilitate a large number of legitimate businesses in fulfilling their monthly sales tax obligations. As per notification 581 issued on April 18th, 2024, the board has partially eased the requirement of filing balance sheets of assets and liabilities for individuals, A.O.Ps, and single-member companies already registered with the FBR.
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