ISLAMABAD: The tax authorities have received above 120,000 income tax returns since launch of new Active Taxpayers List (ATL) on March 01, 2020 and during ongoing lockdown to prevent spread of coronavirus, according to updated list issued June 01, 2020.
The updated ATL for tax, around 120,000 taxpayers filed their annual returns for tax year 2019 since March 01, 2020. The number of active taxpayers increased to over 2.65 million as of May 31, 2020 from 2.53 million returns as shown in new ATL for tax year 2019.
The FBR updates ATL every week and on an average the revenue body receives around 20,000 returns per week. However, due to lockdown in the country after the outbreak of coronavirus the number of financial transactions had fallen drastically.
It is worth mentioning that additional 120,000 income tax returns have been filed after the due date. The due date for filing income tax returns for tax year 2019 was February 28, 2020.
As per law it was mandatory for individuals, Association of Persons (AOPs) and corporate entities to file annual return in order to avail reduced rates of withholding tax on certain transactions.
Filing return after due date a person is required to pay surcharge in order to appear on ATL besides paying late filing penalty.
The sources said changes in law through Finance Act, 2019 were also compelling to file their returns. Through Finance Act, 2019, Tenth Schedule was inserted to Income Tax Ordinance, 2001 under which a person not appearing on the ATL would be liable to pay 100 percent additional withholding tax while making certain transactions.
Prior to this change the persons not filing income tax returns were liable to pay enhanced rate of withholding tax.
Previously, the law provides for the concept of a non-filer and stipulates higher withholding rates for the same which were adjustable at the time of filing of income tax return.
A senior FBR official said that such tax regime had created a misconception that a non-filer can go scot free by choosing not to file income tax return.
The measure are meant to increase the number of filers, however over time the focus shifted to raising additional revenue only.
The measure had not achieved the desired results as the regime did not provide for any legal framework to ensure filing of return by such non-filers, the official said.
In order to remove the aforesaid misconception, the concept and the term of ‘non-filer’ was abolished from the statute, the official added.