Federal Tax Ombudsman (FTO) has directed the FBR to revisit its sales tax registration criteria to ensure a level playing field for retailers.
FTO’s directive comes in response to complaints from various business forums, including the Multan Chamber of Commerce and Industry (MCCI) and Anjuman-e-Tajran. These groups argued that the current criteria, which classify single-shop retailers under Tier-1 status and require them to integrate with the FBR’s Point of Sale (POS) system, is discriminatory and burdensome for smaller businesses.
FTO observed that the current system creates an uneven playing field, with POS-integrated retailers subject to stringent regulatory oversight while non-integrated retailers operate in a less regulated environment. To address this issue, the FTO has recommended that the FBR conduct pre-budget consultations with stakeholders to develop a more equitable and balanced tax regime.
FBR has been directed to re-evaluate its sales tax registration criteria and consider alternative approaches, such as turnover-based classification, to ensure that the tax system is fair and efficient for all retailers.
