The Federal Board of Revenue (FBR) is preparing to impose substantial fines on large retailers that issue non-certified electronic invoices or receipts. According to Business Recorder, the FBR is drafting regulations targeting Tier-1 retailers who fail to accurately report sales tax through the FBR’s electronic system.
Under the proposed regulations, a fine of Rs 500,000 will be imposed for each non-compliant receipt issued by a retailer. To encourage compliance, the FBR also plans to offer consumers a reward of Rs 5,000 for reporting these non-certified receipts to tax authorities. This initiative follows the FBR’s earlier mandate requiring the electronic integration of point-of-sale (POS) systems for all Tier-1 retailers in the textile and leather sectors. The goal was to ensure accurate sales reporting and facilitate proper tax collection.
Retailers are required to install an FBR-provided software extension on their systems, enabling real-time sales tax reporting to the FBR’s server. The FBR has defined Tier-1 retailers into four categories: national and international chain stores, retailers operating in shopping malls, plazas, or centers; retailers with cumulative electricity bills exceeding 1.2 million rupees in the past 12 months; and wholesalers who also sell consumer goods.
In 2022, the FBR launched a POS invoicing prize scheme aimed at promoting tax compliance and enhancing economic documentation. The scheme included monthly computerized draws that awarded cash prizes to 10,000 winners to encourage consumers to obtain proper sales receipts. However, after conducting 10 ballots, the FBR suspended this prize scheme in October 2022.
This new regulatory move signals the FBR’s continued efforts to tighten tax compliance measures and improve transparency in the retail sector, using both penalties and consumer incentives as tools to achieve these goals.
