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FBR starts crackdown against 300,000 non-filers

FBR starts crackdown against 300,000 non-filers

ISLAMABAD: Federal Board of Revenue (FBR) launched crackdown action against 300,000 non-filers of annual returns for tax year 2019.

The tax authorities have started sending notices to individuals and companies who filed their returns and declaration of assets for tax year 2018 but failed to comply this obligation in the subsequent year.

The FBR issued Active Taxpayers List (ATL) on March 01, 2020 for tax year on the basis of return filed up to February 29, 2020.

The ATL revealed that around 2.53 million individuals/companies filed annual returns for tax year 2019. Meanwhile, the estimated return filing for tax year 2018 was increased to record high of over 2.83 million, showing a gap of around 300,000 returns.

However, the return filing has increased by 60 percent when compared with 1.6 million returns filed till February 28, 2019.

Under Section 114 of Income Tax Ordinance, 2001, the FBR explained the mandatory requirement of return filing on certain classes of individuals and companies.

As per the law every company registered with Securities and Exchange Commission (SECP) is required to file returns. But in contrast the FBR received around 40,988 corporate returns for tax year 2019.

On the other hand the SECP had registered around 100,000 companies till June 30, 2019. This shows that around 59 percent corporate entities had failed to comply with mandatory requirement.

A statement issued by the FBR on February 29 revealed that it had received 2.34 million returns from salary and business individuals. While another 62,403 returns were filed by Association of Persons (AOPs).

Tax officials said that the tax authorities had started issuing notices giving opportunity to non-filers to ensure compliance along with payment of late filing.

The sources said that the action had been initiated after expiry of due date for filing tax returns, which was February 28, 2020.

In case persons/company deliberately default then penal provisions may be invoked.

According to tax ordinance, in case a person fails to file return of income by due date than such person is required to pay a penalty equal to 0.1 percent of the tax payable in respect of that tax year for each day of default subject to a maximum penalty of 50 percent of the tax payable provided that if the penalty worked out as aforesaid is less than forty thousand rupees or no tax is payable for that tax year such person shall pay a penalty of forty thousand rupees.

In case a person deliberately not comply with the notice for filing return then such person would be liable to fine or imprisonment for one year.