The Federal Board of Revenue (FBR) has identified 506,671 individuals who have not filed their income tax returns for the 2023 tax year and issued an order to block their mobile phone SIM cards.
This directive, known as Income Tax General Order No. 01 of 2024, was released on Tuesday, mandating the Pakistan Telecommunication Authority (PTA) and all telecom operators to comply immediately.
According to the FBR, these non-filers are required to file their income tax returns under the Income Tax Ordinance of 2001. The list of those affected is available on the FBR’s website. Those listed can check to confirm whether their mobile phone service will be disrupted.
Under Section 114B of the Income Tax Ordinance, the FBR has the authority to take such measures to enforce compliance with tax regulations.
The PTA and telecom operators must block the SIM cards of the individuals named in the order, and the SIM cards will remain deactivated until the FBR or the respective Commissioner of Inland Revenue restores them.
The FBR has set a deadline of May 15, 2024, for telecom operators to report their compliance with the order. Failure to meet this deadline could result in further regulatory action.
The FBR is taking this step to ensure that all those required to file income tax returns do so promptly, contributing to the country’s revenue base.
The provisional revenue collection data for the months of July 2021 to March 2022 of the current financial year 2021-22 have been announced by the Federal Board of Revenue (FBR).
The net collection was Rs575 billion for the month of March 2022, up 20.5 per cent from Rs477 billion in March 2021.
Conversely, the gross revenues, rose by 28.9 per cent in the current financial year, from Rs3,577 billion in July 2020 to March 2021 to Rs4,611 billion in July 2021 to March 2022. Furthermore, the amount of reimbursements granted in March 2022 was Rs31.9 billion, compared to Rs26.3 billion in March 2021, showing a 21.3 per cent upsurge.
Then again, refunds of Rs229 billion were paid from July 2021 to March 2022, a 25 per cent increase over the Rs183 billion paid the previous year.
It is worth noting that the continuous remarkable growth in revenue collection has been achieved despite the government providing ‘massive tax relief’ to the general public on a variety of vital commodities.
For the first time in Pakistan’s history, the sales tax on all petroleum products was abolished, costing the FBR Rs45 billion in the past month.
The spokesperson of the Federal Board of Revenue (FBR) has clarified that a fine of Rs 1,000 will be charged for late tax filers, not Rs 10,000. The clarification came due to the rumours about high fine charges imposed by FBR on filing late income tax returns.
This mistake occurred because of an error in a press release issued on February 24th. According to the clarification, Rs 1,000 will be charged from individuals (salaried and non-salaried) on late filing of income tax returns for the tax year 2020 for inclusion in the Active Taxpayers List (ATL).
Companies will pay a surcharge of Rs 20,000 and an association of person Rs 10,000 for inclusion in ATL. Association of persons is the relation between persons, who have agreed to share the profits of a business carried amongst all stakeholders.
It is noteworthy that the FBR surpassed its collection target by Rs 13 billion to Rs 2.911 trillion in the first eight months of the current fiscal year, as shown in the provisional data released by the tax authorities on Friday.
It was the second consecutive month that the tax collection surpassed its projection. The revenue collection increased by nine per cent during July-February when compared with Rs 2.681 trillion collected in the same period last year.
An official of FBR said that the revenue collection was achieved two days ahead of the end of the current month.
The Federal Board of Revenue (FBR) has received a record number of returns this year, along with the highest ever amount of income tax at the time of filing.
According to a statement issued by the FBR on Wednesday, “A total of nearly 1.8 million returns have been filed together with an amount of about Rs22 billion. Last year, around this time, 1.73 million returns were filed while about Rs13.5 billion were deposited as income tax.”
FBR said it had opted not to extend the last date to file income tax returns beyond December 8, 2020 to restore the credibility and predictability of the final date and promote tax discipline, which worked. However, to ensure that no hardship was faced by taxpayers, a number of special measures were adopted.
These included liberal acceptance of requests for extension in filing date as available under the law; provision to file requests manually besides the online facility; enabling tax practitioners/advisors to file a single request for multiple clients; and enabling the chief commissioners to set up special desks for collection of manual request and sorting their jurisdiction at their level.
The above measures have encouraged a large number of taxpayers to file extension requests, the statement read. It is estimated that at least 300,000 taxpayers have made use of this facility, thus taking the number of potential returns to 2.1 million, which is 21pc higher compared to last year until this date.
It is further clarified that the process of filing is continuing unabated. A comparison with the returns of last year at the close of the deadline, which was 30 June 2020, would be meaningful when the number of additional returns to be filed until 30 June 2021 is available.
The FBR commended the determination of taxpayers, and the support it received from members of tax bars from all over the country, who have made such record setting returns and income tax payments possible. The results establish that the decision not to allow general extension in the last date, would go a long way toward re-establishing much needed trust and credibility of the tax system.
One of the major reasons behind tax gap due to a lower number of tax filers, especially in Pakistan, is lack of awareness as there are numerous benefits of being a filer that most self-employed and salaried individuals don’t know about.
Do you wish to avail better services at airports or excise offices? Want to buy a new car at an affordable price? Or even that top-tier piece of real estate at a lower rate? Want to enjoy a minimal withholding tax on all your banking transactions? Or did you recently suffer a loss in your business and are in dire need of a tax waiver?
If your answer to even any one of these questions is ‘yes’, you immediately need to start filing your tax returns and wealth statement.
You might have thought of becoming a filer but later changed your mind because:
It’s a very complexed process
“My employer deducted it, so why should I even bother?”
Lack of knowledge and awareness regarding this matter
“We are already paying tax through indirect mean”
“Who cares? It’s Pakistan”
Being a tax illiterate can hold you back from getting so many benefits, this article will surely get you on your way to becoming a filer.
Filing your tax returns and wealth statement is beneficial for both you and your government.
And here’s how you can start doing so.
Step 1: Know FBR’s Instructions for Filing Taxes in 2020
Before we get to how to register online as a tax filer and submit your returns, it is important to go through the Federal Board of Revenue’s (FBR) recent instructions on how to file your tax return.
Take a look of the tax slabs for salaried person for tax year 2020/2021
Step 2: Get Registered with FBR E-Enrollment System Online
You can get registered with FBR here and start filing your tax returns online. Previously, FBR used to have separate portals for individuals and companies. But now, they have simplified it further for everyone.
Once signed up, you’ll see a few categories on the left. Go to the registration document in the drafts folder and fill it. When you have filled it and submitted it, FBR will confirm your account and you will be able to submit your tax returns and wealth statements.
If going online is not an option for you, then you can manually file your returns on paper at Taxpayer Facilitation Counters of your respective Regional Tax Office. Paper Return Form can be downloaded from FBR’s website as well or you can file your tax return through Tax Asaan App.
You can also consult this video for any further details.
There are few things you need to know before becoming a filer, watch this video to know about all those things:
What happens if you don’t file your taxes?
Your Income Tax Returns will not Be Entertained if:
Under section 182(1), individuals and companies need to make sure that they don’t fill in wrong details in their forms, failing which will result in penalties for the concerned parties.
CNIC should not be missing or incorrect or invalid
Mandatory fields marked by * shouldn’t be empty
Returns should be duly signed by the taxpayer or his representative (as defined in section 172 of the Income Tax Ordinance, 2001)
Returns should be filed in the prescribed form and format
As announced by the government in a press conference, the due date for all income-tax return (ITR) for FY 2019-20 has been extended from July 31, 2020, and October 31, 2020, to December 8, 2020.
This guide is not meant to be used as an exhaustive resource, however, it does explain the first step for people who are looking to contribute to Pakistan’s well-being and become responsible citizens.
