CTO Karachi launches crackdown against sales tax evaders

KARACHI: The Corporate Tax Office (CTO) Karachi has launched a crackdown against individuals and companies involved in the sales tax evasion, sources said on Thursday.

The CTO Karachi is a major revenue collection arm of the Federal Board of Revenue (FBR) and has jurisdiction over corporate retail entities operating under various sectors.

In its ongoing drive against misreporting of sales, the CTO Karachi deputed officials at business premises of various private limited companies.

The tax office invoked Section 40 of Sales Tax Act, 1990 and deputed Inland Revenue officers at a bakery, having 14 branches, an online and carpet retailers.

The sources said the tax office had suspicion that the units were misreporting their sales to evade the tax revenue. The officers, who are deputed at the units, are monitoring each transaction made during a day.

The sources said the officers had been deputed for an indefinite period. However, after a few days, the tax authorities will be able to assess the actual monthly sales of the units, they added.

The Federal Board of Revenue (FBR) has launched a major initiative to document sales and purchases. In this regard, the revenue body has made integrating Point of Sale (POS) for big retailers to ensure online reporting of sales.

The CTO Karachi is also moving in this direction and identifying retailers for POS compliance. The units recently identified were also not compliant with the integration.

The tax office has also asked the retailers to install POS to avoid any adverse action.

The sources said the CTO Karachi has also planned action against several other retailers who were engaged in misreporting of their sales.

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