ISLAMABAD: The Federal Board of Revenue (FBR) has issued the Sales Tax General Order (STGO), binding officers concerned to consult with representatives of the business community before ordering any investigation to arrest a businessman on charges of tax fraud.
The Special Investment Facilitation Council (SIFC), after hearing both the sides, the FBR and businessmen, decided that safeguards for making arrests of businessmen would be put in place without amending the Finance Act 2025 through an explanatory circular and the STGO. Earlier, the FBR issued an explanatory note and issued an STGO for making the process of initiating any inquiry against businessmen.
The FBR has issued a detailed procedure for investigation before any arrest of businessmen under Sales Tax General Order (STGO) number 2 of 2025 on Wednesday.
The representatives of the business community responded that the notification of pre-arrest committee regarding section 37A of the Sales Tax Act, 1990, as per agreement, having two representatives of the business committee from the zone concerned, has been issued by the FBR. This will be a safeguard that no undue pressure/action is taken against the business community of Pakistan because of the presence of our two members in the committee, they added.
According to the STGO, the Board has directed that the following procedure shall be followed before initiating investigation leading to action under sub-section (8) and (9) of section 37A of the Sales Tax Act, 1990.
(a) Inquiry shall not be initiated unless approval from the commissioner has been obtained.
(b) After conclusion of inquiry, the commissioner shall not give approval to initiate investigation unless he has obtained approval from the Member (Inland Revenue Operations) of the Board.
(c) Before seeking approval of the Member (lnland Revenue Operations), it is binding upon the commissioner to make consultation with two representatives of the business community from amongst such representatives as notified by the Board.
(d) Board shall notify a list of representatives of business community on FBR’s web portal.
(e) Trade organisations mentioned shall nominate two persons each (who should be compliant and reasonably significant taxpayers) and send their names to the Member Inland Revenue Operations, FBR Headquarters.
The trade organisations mentioned in the STGO shall nominate two persons each (who should be compliant and reasonably significant taxpayers) and send their names to the Member Inland Revenue Operations, FBR Headquarters.
The Member Inland Revenue Operations shall nominate 02 persons for each region, for consultation from amongst persons nominated by the Trade Organizations based on the income tax payments made by them for the latest tax year, exports, and compliance history. The Member Inland Revenue Operations shall not select more than one person from a nominating trade organisation in one region.
