The National Board of Revenue (NBR) has tightened rules regarding import of capital machinery at a reduced rate in its bid to plug the loopholes which enable tax evasion.
In a notification published yesterday, the NBR said firms that import capital machinery on payment of one percent import tariff will have to maintain books of accounts or receipts of chalan in order to enjoy the reduced tariff benefit.
The field offices then raised the issue of possible tax evasion.
The revenue administration allowed businesses to import capital machinery and spare parts on payment of one percent import tax since June 9, 2022.
It attached the condition that importers will have to have industrial import registration certificates and file VAT returns regularly.
Taking advantage of this, a section of firms is not submitting any VAT returns, meaning that they are not generating any sales needed to pay the indirect tax.
“We offered the reduced import benefit for capital machinery and spare parts on the belief that this opportunity will not be misused,” said the NBR official.
“But we have received quite a different feedback from the field,” he said, explaining the reasons behind the rules requiring firms to maintain records of accounts of transactions related to VAT.
Daily Star
