Federal Board of Revenue (FBR) has introduced a new system called the ‘Swipe Payment Receipt System’ to prevent tax theft by withholding agents. Under this system, all taxes deducted by withholding agents from suppliers of goods and services will now be directly deposited into the government treasury to promote taxation and documentation. This initiative aims to increase tax revenues and documentation, as previously withholding agents used to hold onto the taxes deducted from suppliers and submit tax statements and challans to FBR. However, under the new system, the withheld tax amount will be directly deposited into the government treasury, along with the necessary details provided by the notified withholding agents.
Furthermore, this new system requires withholding agents to provide details of the supplies and purchases, allowing FBR to track the items on which taxes have not been paid. In accordance with the rules issued by FBR, a new chapter titled Part 4 has been added to Chapter 9 of the Income Tax Rules 2002. The application of these rules will be applicable to all notified withholding agents, with them required to fulfill all the requirements outlined in the new chapter number four. The digitalization of invoices will be facilitated through installation of a point of sale system by FBR licensed individuals or companies, enabling withholding agents to directly submit digital invoices to the government treasury.
Moreover, all transactions conducted by the notified withholding agents will have their tax amount immediately deposited into the government treasury, with the remaining original amount transferred back to the withholding agent. Each withholding agent will be issued a swipe ID, and updating their profile is mandatory. Additionally, the details required to be provided include contract details of supplied items, partial payment information, transaction details, and relevant tax-related information. The system aims to improve tax collections, documentation, and transparency while reducing tax evasion and ensuring compliance with tax laws. Violators of tax regulations will face penalties and legal actions under the Income Tax Ordinance 2001.