KTBA highlights glitches in digital payment for corporate entities
KARACHI: The Karachi Tax Bar Association (KTBA) has pointed out glitches in the digital payments, which is made mandatory for corporate entities, a statement said on Monday.
The KTBA sent a letter to the Federal Board of Revenue (FBR) chairman, saying that the mode of digital payment has been made mandatory through a new provision of law promulgated through the Tax laws (Third Amendment) Ordinance, 2021. This provision will be implemented from November 1, 2021.
Muhammad Zeeshan Merchant, president of the association, said that the condition is in contradiction with other modes of payment through the banking channels, which is historically remained in practice and is widely accepted under the provisions of the Income Tax Ordinance, 2001.
“This provision of law is anti-business; sans due diligence and is incorporated without taking the stakeholders into confidence,” Merchant added.
Additionally, it is not practical for many business houses. Normally, it is a practice that the port terminal charges, wharfage charges, charges for clearance of delivery orders etc, are paid in advance through crossed cheques or pay-orders. The businesses, including but not limited to the port terminal operators and shipping lines, are unaware and are not ready for implementation of this “digital mode of payment”.
“In our view, it needs a rigorous awareness campaign for them.”
Further, similar issues are likely to arise and are to be faced by the companies for making payments to the growers of various agricultural crops such as sugarcane, rice, cotton, wheat, etc.
“Moreover, in our view this digital mode of payment is also impractical and is likely to affect the business transactions in the cases where petty cash payments, in aggregate exceed millions of rupees, which cannot be made digitally,” he said.
Various banks have fixed their own limitation on the quantity of making digital/online payments in a day and have also fixed the threshold of the amount and they do not allow to exceed the threshold limit fixed by them.
Merchant said: “In our view, this also needs a proper campaign without which the implementation of the law is not possible.”
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