The Federal Board of Revenue (FBR) has granted a 40-day grace period until November 1, 2021 to allow corporate taxpayers to digitalize payments under the Tax Law Ordinance 2021 (Third Amendment).

The FBR has also approached the State Bank of Pakistan (SBP) and issued the necessary instructions to activate the provision of this law and called on the banking sector to make it easier for companies to complete digitization within a specified period of time in accordance with the FBR. release.

According to the FBR, the government is considering giving corporate taxpayers an additional 40 days to go digital to make payments in accordance with the Tax Law (Third Amendment) Regulations 2021.

The new law limit payments through traditional banking channels to expenses of taxpayers who are not legal entities worth more than Rs. 250,000 rubles. Thus now companies are forced to pay expenses in the amount of more than Rs. 250,000 only in digital form.

FBR has taken this step to curtail grey transactions in the Corporate sector. Majority of transactions in the Corporate sector was taking place thorugh cash/Cheque.

While another practise in the corporate sector is to use third party cheques for payments, where companies do not pay directly from their own accounts.

FBR has allowed payment of expenditures related to utility bills, freight charges, travel fair, taxes through cash or Cheques /Pay Orders.

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