Extension in deadline for filing of IT returns: 300,000 taxpayers utilise 'liberal' acceptance of requests

ISLAMABAD: The Federal Board of Revenue (FBR) is liberally accepting requests of taxpayers for extension in date for filing of income tax returns and at least 300,000 taxpayers have utilized the facility to file returns after expiry of due date of December 8, 2020.

According to the details released by the FBR here on Wednesday, the government had decided not to extend the final date of 8th December 2020 with a view to restore the credibility and predictability of the final date, and to promote tax discipline.

However, to ensure that no hardship was faced by taxpayers, a number of special measures were adopted.

These include 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 which are being granted. 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 21 percent higher compared to last year until this date.

The FBR stated that the FBR has received record number of returns along with highest ever amount of income tax at the time of filing.

A total of nearly 1.8 million returns have been filed together with an amount of about Rs22 billion.

Last year at this time, 1.73 million returns were filed, while about 13.5 billion were deposited as income tax.

Comparatively, the returns are higher by four percent and tax deposited is higher by 63 percent.

It is further clarified that the process of filing is continuing unabated. A comparison with the returns of last year at the close of 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 commends the determination of the 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.

The FBR has also decided to immediately roll-out action against the taxpayers who neither have filed the tax returns nor sought permission for extension.

The FBR had achieved this feat only because of the dedicated efforts of its chairman, members, its field formations, and the new IT team that has ensured that there was no major problem with its automated system of tax filings.

The FBR is working in accordance with the vision of the prime minister who has given top priority to the automation of all the FBR processes.

The guidance and support provided by the PM's Advisor on Finance and the SAPM Revenue have also played an important role in registering this performance, the FBR added.

When contacted, Dr Ikramul Haq, an international tax lawyer told Business Recorder that according to the FBR Year Book 2018-2019: "The trend for filing of income tax returns has not been satisfactory in Pakistan. Keeping in view very low compliance, FBR had initiated a Broadening of Tax Base (BTB) drive few years ago, which has now started paying dividends in shape of growth in the number of filers. The income tax returns which were just 1.5 million in tax year 2016 have crossed the two million mark first time in the history of FBR. During tax year 2017 the number of income tax filers reached to 1.9 million and in tax year 2018, 2.2 million." "During tax year 2018 the number of return filers increased by 17.1% or 316,526 in absolute terms. This performance in terms of number of returns is satisfactory but payment with returns has a meager growth of 3.0%, which is the matter of concern," he added.

Copyright Business Recorder, 2020