ISLAMABAD: In a key step toward tax reform, the Federal Board of Revenue (FBR) will begin accepting simplified digital tax returns from salaried individuals starting July 15, aiming to streamline compliance and encourage broader participation in the tax net.
The development was shared during a high-level meeting chaired by Prime Minister Shehbaz Sharif on Monday to review progress on the digitisation of the FBR, including the implementation of an Artificial Intelligence (AI)-based assessment system and other structural reforms.
According to the official briefing, salaried taxpayers will benefit the most from the new digital forms, which have been made concise, user-friendly, and available in Urdu. The Urdu-language returns for salaried individuals will also be formally available by July 30.
During the meeting, the prime minister said that expanding the tax base and reducing the burden of taxes on the poor were among the top priorities of the government.
Hailing the availability of simple tax returns in Urdu, he said that a helpline should be established to assist with the process of filing tax returns and digital invoicing should also be launched in Urdu. “In tax reforms, the focus should remain on the convenience of the common man,” he added.
The premier directed that third-party validation be ensured for all FBR reforms to maintain transparency. He said that for the public’s convenience, tax returns have been made extremely easy by making them digital, concise, and linked with a centralized database.
PM Shehbaz instructed that a public awareness campaign should be launched about the ease of tax returns so more and more people can file their returns under the new system.
He also praised Finance Minister Muhammad Aurangzeb, the economic team, the FBR chairman, and their teams, saying that the positive results of tax reforms are the outcome of their tireless efforts.
“For the first time in the country’s history, the implementation of an AI-based tax assessment system is a big success, and the FBR’s initiatives are commendable,” he said.
He also instructed that small and medium-sized businesses should be given special support in joining the digital invoicing system.
Meanwhile, the participants were briefed on progress related to digital invoicing, e-bilty, simplified tax returns, the AI-based assessment system, the establishment of a central command and control center, and the cargo tracking system.
It was informed that bidding for the FBR command and control unit would be completed soon, and the system will be fully functional by September. This will not only provide centralised data but also help in decision-making.
The meeting was also informed about the AI-based assessment system. Traders are now allowed to submit advance goods declarations before the arrival of ships. Under this, they will get full exemption on upfront duties and taxes. With this system, the percentage of advance goods declarations is expected to rise from 3% to over 95%. This will also allow containers with advance declarations to be delivered directly from the port to factories.
Regarding digital invoicing, the meeting was told that now all businesses, both large and small, will be required to issue receipts at the time of sale through the FBR’s online system. Around 20,000 businesses are expected to join this system in the coming months. In just one month, 8,000 invoices amounting to 11.6 billion rupees were issued through this system.
This system includes a taxpayer portal and a monitoring dashboard. It was shared that businesses can join the system free of cost through PRAL (Pakistan Revenue Automation Ltd). Training is also being given to traders. Once fully implemented, there will be no need to submit sales tax returns separately, as all transactions will be automatically recorded in the system.
Additionally, the internationally recognized 8-digit HS Code will help eliminate fake and flying invoices. Digital invoicing will also make it easier to assess the performance of the sales tax system. Business training sessions are being held to make the system effective.
The meeting was also briefed about the progress of the cargo tracking system and e-bilty system.
It was explained that the system will allow real-time monitoring of the movement of goods and tax payment tracking. AI-based assessment will also be possible through this, which will make tax enforcement more effective and efficient.