Indirect Tax Landscape and Digital Transformation

Amid evolving business landscape, Federal and Provincial tax authorities have strategically increased their reliance on indirect taxes as a crucial revenue stream, aiming to expand the tax base and reinforce the nation's fiscal framework. The complexity of legislation which is continuously evolving, has made it increasingly difficult for businesses to navigate and comply with their indirect tax obligations.

Moreover, technological changes play a central role in the management of these taxes, further complicating compliance efforts. Resultantly, right approach to indirect taxes is essential for effective management of tax risk and and avoiding potential pitfalls.

Pakistan has begun implementation of digital e-invoicing, a strategic move aimed at enhancing efficiency of tax filing process for taxpayers while strengthening compliance with tax laws and regulations. This transition to e-invoicing presents significant opportunities for businesses to streamline operations and improve overall efficiency.

At KPMG, we have expertise to assist clients in implementation of digital e-invoicing, including ensuring compliance with required formats and standards, as well as integrating various internal systems to ensure seamless operation.

We can support you with

Indirect tax laws comprises of Sales Tax Act 1990, Federal Excise Act 2005, Sindh Sales Tax on Services Act 2011, Punjab Sales Tax on Services Act 2012, Khyber Pakhtunkhwa Sales Tax on Services Act 2013, Baluchistan Sales Tax on Services Act 2015, Islamabad Capital Territory Sales Tax on Services Ordinance, 2001 and AJK Sales Tax (Tax on Services) Act, 2001.

We assist businesses in implemention of digital e-invoicing systems, ensuring compliance with digital invoicing requirements. Our team ensures smooth integration with existing processes, enabling timely tax reporting and reducing administrative burdens.

At KPMG we offer our clients Digital Gateway (DG) which is an effective tool to set calendar for month sales tax fillings and track various compliances. Besides tracking, DG also provides option for easy transmission of data from client to us.

We provide tools / support which enable our clients in data gathering, preparation and filing of sales tax returns with impact assessment of input tax having nexus to the business and potential risk of dispute by the tax authorities.

We assist our clients in processing of refunds through FASTER, RCPS, STAAR and manage follow-ups with tax authorities for timely credit of funds in client's bank. Our team also addresses delays / disputes through filing of complaints before the Federal Tax Ombudsman (FTO) so as to ensure ease of businesses for the client.

We assist our clients in filing appeals against tax disputes with tax department, including audit / assessment, penalty proceedings, and stay of demand. Our experienced team helps navigate tax disputes, developing strategies to protect clients’ interests and achieve favorable outcomes.