ISLAMABAD-Federal Board of Revenue (FBR) Chairman Shabbar Zaidi on Friday said that FBR is committed to automate the taxation system.

"FBR is thankful for the overwhelming and productive response of Tier 1 Retailers for integration with ‘Point of Sales’ (POS) system. FBR IT will ensure compatibility of ‘systems’ with FBR software. We are fully committed to automated system with least human intervention," chairman said on Twitter. He further said that integration of Tier 1 Retailers with automated ‘Point of Sales’ system is a win win situation both for such retailers and FBR. FBR assures a smooth, harassment and hassle free transition. It will be ensured that a transparent system with least human intervention is put in place, he added.

The drive for installation of automated ‘Point of Sale’ (POS) system at big retailers located in luxurious shopping malls, retail chains and stores having 1,000 square feet size across the country was stated from the start of current month (December).

The drive is part of government’s commitment to document sales of big retailers who are currently evading payment of taxes, which runs into billions. It is estimated that FBR will raise around Rs20 billion in taxes from brining all these retailers into the net. These shops collect taxes from consumers, but the same is not always deposited with FBR.

The FBR had directed all ‘Tier-I’ category of retailers to integrate their retail outlets with Board’s computerized system for real-time reporting of their sales. From December 2019, all Tier-I retailers shall integrate their retail outlets with Board’s computerized system for real-time reporting of sales in the mode and manner as prescribed.

The supplies of finished fabric and locally manufactured finished articles of textile and textile made-ups and leather and artificial leather shall be entitled to the reduced rate subject to conditions. The retail supplies of these items shall be subject to standard rate as prescribed if they are made from retail outlets which are not integrated in the manner prescribed by the FBR.

The integrated supplier who is found to have tampered with the system would no more be eligible for the reduced rate, if otherwise applicable, and his input tax shall also be reduced, the FBR added.

The FBR had introduced ‘Electronic Invoice System’ for restaurants, cafes, coffee shops, eateries, snack bars and hotels, and directed them to install Board’s approved fiscal electronic device/software and register all their branches and each point of sale (POS) with the FBR’s computerized system.

Under the amended sales tax rules 2006 last month, the FBR had also directed all ‘Tier-I’ category of retailers to integrate their retail outlets with Board’s computerized system for real-time reporting of their sales.

Tier-1 covers a retailer operating as a unit of a national or international chain of stores; a retailer operating in an air-conditioned shopping mall, plaza or center, excluding kiosks; a retailer whose cumulative electricity bill during the immediately preceding 12 consecutive months exceeds Rs 600,000; a wholesaler-cum-retailer engaged in bulk import and supply of consumer goods on wholesale basis to the retailers as well as on retail basis to the general body of the consumers and a retailer, whose shop measures 1,000 square feet in area or more.