Unveiling the Issue of Fake Receipts and Open Tax Theft by Businesses in Pakistan

A recent Twitter by Zubair Ahmed Khan has shed light on a concerning issue of businesses issuing non-FBRPOS (Federal Board of Revenue Point of Sale) invoices, indicating potential tax evasion and open tax theft.

Zubair Ahmed Khan shares his encounter with Pizza Hut in Islamabad, where he claims they responded confrontationally and admitted to issuing such invoices. This incident has raised concerns about the prevalence of tax evasion practices, both locally and internationally.

Pizza Hut in #Islamabad issuing NON #FBRPOS invoices on confrontation said "Jo Karna hai Kar Lou"

Tu jo kar saktay thay woh kya, Rs 1 Million Penalty notice served by FBR

Local & International Everyone in a race to evade & pocket more tax@PizzaHutPak #TaxChoriBandKaru pic.twitter.com/YgwZnl7fZn

— Zubair Ahmed Khan (@ZubairKhanPK) July 14, 2023

The Problem of Non-FBRPOS Invoices:

Zubair Ahmed Khan’s Twitter reveals that Pizza Hut in Islamabad issued invoices that do not comply with the FBRPOS system, which is mandated by the Federal Board of Revenue. This system ensures proper recording and reporting of sales transactions, enabling accurate taxation.

The confrontation between Zubair and the Pizza Hut staff, where they dismissively stated “Jo Karna hai Kar Lou” (Do whatever you want), highlights a lack of compliance and an attitude of evading taxes.

The Impact of Tax Evasion:

The issuance of non-FBRPOS invoices and the subsequent tax evasion have serious consequences for the economy and society. When businesses evade taxes, the government loses a significant source of revenue that could be used for public welfare, infrastructure development, and essential services. This loss affects the overall economic growth and development of the country, leading to an unequal distribution of resources.

The Role of the Federal Board of Revenue (FBR):

The FBR is responsible for regulating and ensuring tax compliance among businesses. In this case, the FBR has reportedly served Pizza Hut with a penalty notice of Rs 1 million. However, the incident raises questions about the effectiveness of the FBR’s monitoring and enforcement mechanisms.

It is crucial for the FBR to conduct thorough investigations, impose appropriate penalties, and take necessary steps to prevent such tax evasion practices.

Widespread Nature of the Issue:

Zubair Ahmed Khan’s has attracted responses from Twitter users who share similar experiences with Pizza Hut outlets in other cities, such as Karachi and Hyderabad. This suggests that the problem might not be limited to a single location or business. The issue could potentially extend to other businesses as well, raising concerns about the scale of tax evasion in the country.

Zubair bhai, same issue I have faced on various outlets of khi and Hyd… They dont issue the pos slip imposed by fbr…. And on inquiry say that our machine does not work.

— YK (@MuhammadYassar) July 14, 2023

To address the problem of non-compliance and tax evasion, both businesses and regulatory authorities need to take proactive measures.

It is crucial for businesses to understand their legal obligations and comply with the FBRPOS system to maintain transparency in their financial transactions. Additionally, the FBR should enhance its monitoring and enforcement mechanisms, conduct regular audits, and impose strict penalties for non-compliance.

The incident highlighted by Zubair Ahmed Khan’s Twitter exposes the alarming issue of businesses issuing non-FBRPOS invoices, indicating tax evasion and open tax theft. This problem has far-reaching implications for the economy and society, necessitating immediate action from both businesses and regulatory authorities.

By promoting tax compliance, implementing effective monitoring mechanisms, and enforcing penalties for non-compliance, it is possible to curb tax evasion and ensure a fair and equitable tax system that benefits the country as a whole.