The All Pakistan Textile Mills Association (APTMA) has urged the Federal Board of Revenue (FBR) to revise proposed sales tax penalty provisions in the Finance Bill 2026, warning that the measures could unfairly penalize compliant businesses for the actions of their suppliers.
In a letter addressed to FBR Chairman Rashid Mahmood Langrial, APTMA expressed support for the government’s efforts to combat fake invoicing and tax fraud. However, the association raised concerns over the proposed insertion of Serial Nos. 30 and 31 in Section 33 of the Sales Tax Act, 1990.
According to APTMA, the proposed provisions could require buyers to reverse input tax claims, pay default surcharges, and face additional penalties if suppliers later fail to declare output tax liabilities or are added to the FBR’s Simulated Invoice Issuers Register. The association argued that such penalties could be imposed even when buyers had relied on invoices that were validated through the FBR’s computerized systems at the time of purchase.
The textile body noted that large manufacturing businesses process thousands of transactions every month and cannot realistically monitor the future tax compliance status of hundreds of suppliers after transactions have been completed.
APTMA warned that the proposed measures could increase compliance costs, create uncertainty in commercial dealings, disrupt supply chains, and trigger unnecessary legal disputes between businesses and tax authorities.
The association has requested the government to amend Serial No. 30 by introducing safeguards for bona fide taxpayers and to withdraw Serial No. 31 in its current form. APTMA maintains that penalties should only be imposed in cases where fraud, collusion, or deliberate tax evasion has been established through proper investigation.
Industry representatives believe that while efforts to curb tax fraud are necessary, regulatory changes should strike a balance between enforcement and the protection of legitimate businesses operating in good faith.
The development comes as stakeholders from various sectors continue to review and assess the potential impact of the Finance Bill 2026 on business operations, taxation, and investment across Pakistan.
