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FBR mandates exchange firms to report failed transactions

FBR mandates exchange firms to report failed transactions

FBR mandates exchange firms to report failed transactions
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KARACHI: The Federal Board of Revenue (FBR) has made it mandatory for the exchange companies to provide details of failed transactions to prevent misuse of foreign exchange regime.

In this regard, the apex tax body issued SRO 50 (I)/2022 to make it mandatory for the foreign exchange dealers and companies to report the failure of transferring sales or bill data to the FBR. The revenue board amended the Income Tax Rules, 2002 to give legal cover to the changes. It amended Rule 33G to insert foreign exchange dealers and companies.

The revenue board is providing facility on its website to a customer of an integrated enterprise to verify and ensure that the invoice or bill issued to him has been duly communicated to the FBR’s computerised system and in case of non-verification, he may upload the image of the invoice or bill to the portal.

Sources in the FBR said that the measure has been taken to ensure the transfers of foreign exchange against the invoices issued by the corporate entities or individuals.

They said due to misreporting of transactions, the country lost a huge amount in foreign exchange.

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For the last one year, the country is facing the exchange rate volatility. The local unit recorded a decline of Rs18.68, or 11.86 per cent, from the closing of June 30, 2021 at Rs157.54 against the dollar to Rs176.22 on January 19, 2022.

Previously, the State Bank of Pakistan (SBP) also took measures to discourage buying from the exchange companies.

It was made mandatory for all the foreign currency sale transactions equivalent to $500 or above. The exchange companies should retain copies of identification documents, i.e., Computerised National Identity Card (CNIC); National Identity Card for Overseas Pakistanis (NICOP); Pakistan Origin Card (POC); and a passport having valid visa on it or any other proof of legal stay of a foreigner in Pakistan after having seen the document in original.

In addition, the exchange companies would also carry out biometric verification of the Pakistani nationals for all such transactions and maintain the record thereof. The exchange companies will also obtain supporting documents related to the purpose, as stated by the customer of FCY sale transactions, exceeding $1,000 or equivalent in other currencies.

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