ISLAMABAD: Number of tax returns filing for the tax year 2019 reached the 2.59 million mark up to March 23, the official data showed.
The Federal Board of Revenue (FBR) received 60,000 more income tax returns since the launch of new active taxpayers list (ATL) for tax year 2019 on March 1, 2020. The FBR updates ATL every week and on an average the revenue body is receiving around 20,000 returns per week.
The pace of returns filing is expected to decline in the coming days as financial transactions drastically fell on coronavirus-related lockdown. The additional 60,000 income tax returns were filed after due date. The deadline for filing of income tax returns for the tax year 2019 was February 28, 2020.
Under a law, it is mandatory for an individual to file annual returns to avail reduced rates of withholding tax on certain transactions. However, the taxpayer is required to pay surcharge and late filing penalty in order to appear on ATL. The law amendment, through the Finance Act 2019, compelled taxpayers to file their returns. Under the law, tenth schedule inserted into the Income Tax Ordinance, 2001, a taxpayer not appearing on the ATL would be liable to pay 100 percent additional withholding tax while making certain transactions.
Previously, individuals not filing income tax returns were liable to pay enhanced rate of withholding tax. Such tax regime created a misconception that a non-filer could go scot-free by choosing not to file income tax return. The measure was meant to increase the number of filers, but the focus was shifted to raising additional revenue only. The measure could not achieve the desired results as the regime did not provide for any legal framework to ensure filing of return by such non-filers. In order to remove the misconception, the concept and the term of ‘non-filer’ was abolished from the statute.