FBR to notify ATL of income tax returns filers

After successful implementation of the 'Active Taxpayer List' (ATL) on the sales tax side, the Federal Board of Revenue (FBR) will shortly notify the 'Active Taxpayer List' (ATL) for the income tax return filers for Tax Year 2010 and withholding tax statements for the Tax Year 2011.
Sources told Business Recorder here on Sunday that the FBR had circulated the draft of the SRO 09(I)/2011 on January 6, 2011 to propose amendments to the Income Tax Rules 2002 for issuance of the ATL on the income tax side. After obtaining viewpoint of stakeholders, the FBR would issue the final notification in coming days to take action against all non-filers of returns for the Tax Year 2010 and non-filers of statements for the Tax Year 2011. The ATL rules would be dully applicable for the return filers for the Tax Year 2010 as well as Tax Year 2009.
According to sources, the FBR would treat the non-compliant persons as suspended till they become compliant as far as filing of returns and payment of taxes was concerned. The implementation of the ATL is an automatic tool for compliance of sales tax returns, income tax returns and payment of advance tax and prompt reply of legal notice.
During the period a person remained out of the ATL, he will considered as suspended for all practical purposes which means that his buyers will not be able to get benefit of input tax adjustment. Similarly, his buyer will not be able to get benefit of refund claims and benefit of recently issued SRO 283(I)/2011 (sales tax zero-rated sectors). Zero-rating facility would also not be available to the inactive taxpayers because registration of non-active taxpayers will be treated as suspended and they will not be able to participate in the tenders floated by various government departments and private limited companies.
Once the ATL has been notified on the income tax side, the registered persons would have to become compliant for both the income tax and sales tax sides and regularly file their returns. In case return of sales tax or income tax is not being filed, the name would be excluded from the ATL. The registered persons would have to file both the income tax returns as well as sales tax returns to avoid exclusion of their names from the ATL. The non-filers of returns for the Tax Year 2010 would also face action under the ATL and their names would be excluded from the list till they start regularly filing their returns. This means that the registered persons have to file both the sales tax and income tax returns on regular basis. If a taxpayer is compliant on sales tax side, but failed to file income tax return, the FBR will suspend his registration.
According to the new procedure, the registration of the taxpayer removed from the ATL will be treated as suspended for the period of his removal and shall not be treated as a registered person during the suspension period unless regularised through an order by the respective Commissioner (Enforcement).
The entire suspension period of registration will automatically be regularised immediately upon compliance by the defaulter. The procedure shows that the non-compliant taxpayers will be removed from the Active Taxpayers List through the automated system.
In case of persons required to file the declarations electronically, upon expiry of the due date, the computer system will send an e-intimation at the registered e-mail address of the taxpayer informing him about his default and advising him to make the compliance within 7 days time, failing which the name shall be removed from the ATL.
After completion of 7 days' compliance time after issuance of the e-intimation sent through the computer system, the computer system will remove automatically the name of the non-compliant taxpayer from the ATL. In case of persons not required to file the declarations electronically, upon expiry of the due date and feeding of all the returns in the computer system, the respective Commissioner (Enforcement) shall initiate the ATL process through the computer system whereby the computer system will print 'Intimation Letter' to the non-compliant taxpayer informing him about his default, advising him to show the compliance within ten days, failing which his name will be removed from the ATL.
Upon receipt of the return, the respective Commissioner (Enforcement) shall arrange to feed the return to the computer within a week. After completion of a period of 10 days of the intimation issued by the computer system, the computer system will remove the names of the non-compliant taxpayers from the ATL. The computer system will execute the ATL procedure every night at 2400 hrs and bring the compliant taxpayers back to the ATL.
Under the new rules, the Board will publish Active Taxpayers List, comprising persons complying with the following within due date: Filing the return of income/statement u/s 114 & 115, filing the wealth statement u/s 116, filing of return u/s 143 & 144, filing the statement of tax deduction u/s 165, deducting the tax at source and depositing it, paying the advance tax, responding to the notice issued by the commissioner of Inland Revenue and any other statement prescribed by the Board.
The rule further said that initially all the compliant taxpayers meeting the following criteria will be included in the ATL: E-filers of return of income/statement u/s 114/115 for Tax Year 2009, e-Filers of Quarterly Employer Statements on deductions made u/s 149 of the Income Tax Ordinance 2001, for tax years 2009, onwards, e-Filers of Quarterly Withholding Tax Statement u/s 165 of the Income Tax Ordinance 2001, for tax years 2009, onwards, employees whose annual income is Rs 500,000 and above (as reported by their employers) and e-filed their income tax returns for TY-2009, onwards and meet the criteria laid under Sales Tax, Federal Excise and Customs for including the taxpayers in the Active Taxpayers List. Following actions will be taken in advance for informing the taxpayers regarding their non-compliance: a) Provisional Active Taxpayers List will be made available on the FBR's web portal (15) days prior to its finalisation. b) Access to the ATL will be on cases to case basis through the NTN or CNIC of the taxpayer. c) e-intimations will be sent to the e-enrolled persons not qualifying the criteria referred above and thirty days' time shall be allowed to ensure compliance, FBR rules added.