The Federal Board of Revenue (FBR) has empowered tax authorities to seal registered business premises that fail to connect to its monitoring system, with police assistance available if needed to enforce the closure.
The power comes through fresh amendments to the Sales Tax Rules, notified by the FBR this week. Under the revised rules, businesses covered by the framework must install a production monitoring, video surveillance or digital eye system, and keep it linked to the FBR’s network. Registered taxpayers that do not comply will face enforcement action.
The notification lays out a step-by-step process before any premises can be sealed. An Assistant Commissioner or a more senior officer must first submit a written report to the Commissioner Inland Revenue, who is authorised to start proceedings on that basis. The Commissioner will then conduct an inquiry and forward the findings to the Chief Commissioner.
The Chief Commissioner alone will decide, through a written order, whether the business is to be sealed. The order can cover the whole premises or only a specific part of it, and the business owner must receive a copy before the sealing is carried out.
A sealed premises will stay closed until the monitoring system is connected to the FBR. To have the seal removed, the owner must pay a penalty and install the required system. An FBR technical team will be present during installation. Once the system is in place, the Commissioner is required to issue a certificate within three days.
The notification also states that the electronic monitoring rules may be extended to additional businesses and manufacturers in the future, signalling that the compliance requirement could widen beyond the sectors currently covered.
