ISLAMABAD: The Federal Board of Revenue has decided to integrate professional services online with tax apparatus nationwide on July 1st, after a four-year wait.
December 22, 2023 saw the publication of the plan’s initial draft regulations. Later, another notification SRO428 of 2024 modified these proposed rules by establishing a specific timeline for the decision’s implementation beginning on July 1.
According to an official source who spoke to Dawn, the Special Investment Facilitation Council (SIFC) took serious notice of the failure to implement the plan in urban areas to tax professional service providers’ income, which is primarily cash-based and not subject to taxation. This was during the caretaker government’s tenure.
Twelve kinds of sales and service providers were to interface with FBR in August 2020 in order to track their sales and services, according to an SRO779 announcement made at the time by tax officials. This decision will result in the installation of software and electronic equipment on these services’ property. Two more service providers were added to the list later on: private educational institutions and foreign exchange dealers/exchange firms.
The deadline for service providers to link to the online system is July 1st, established by FBR.
These laws will, however, apply to private schools, colleges, universities, professional institutes, and vocational training centers if the monthly cost per child surpasses Rs 1,000.
The most recent SRO from the FBR, dated March 22, significantly changed what service providers needed to meet in order to be taken into account for integration. The majority of the time, the service providers’ reach was increased to encompass the largest possible number of taxpayers.
The program’s reach will extend beyond eateries, lodging facilities, motels, guest homes, wedding venues, marquees, and nightclubs, including racetracks, lacking air conditioning.
In order to reach as many taxpayers as possible, the tax drive’s scope has been expanded by eliminating previously existing exemption criteria.
The exemption requirement of travel service keeping a fleet of fewer than 10 vehicles has been lowered to five vehicles in the event of intercity road travel. As a result, intercity travel will be maximized under the tax system.
Regardless of their circumstances, all medical service providers, including veterinarians (doctor of animals), physiotherapists, plastic surgeons, hair implant surgeons, and dentists, should be integrated with the FBR.
The requirement of the consultation fee has been changed from Rs1,500 to more than Rs500 per patient. Despite the fact that doctors profit greatly from their private practices and surgeries, there is no system in place to tax their income.
The main modification is that the program will be available to all types of pathology and medical diagnostic laboratories, regardless of their locations or branches. In a same vein, any form of private medical facility, including hospitals, will register with the FBR.
The program’s purview was expanded to include health clubs, fitness centers, swimming pools, and multipurpose clubs run by any kind of government, such the Lahore Gymkhana, Islamabad Club, Chenab Club, Karachi Gymkhana, Royal Palm Lahore, Polo Club, etc.
The FBR, which charges more than Rs50,000 per event, would merge with all photographers, videographers, and event coordinators. This cap was formerly set at Rs 100,000. Cost and management accountants as well as chartered accountants were the types of accountants that had to be integrated.
