Wednesday, October 20, 2021

FBR softens stance on penalising late filers

KARACHI: Taking cognizance of technical and non-technical hurdles in returns filing, the Federal Board of Revenue (FBR) has decided to act realistically and refrain from imposing penalty on late filers across the board, people familiar with the matter said on Saturday.

Sources said the FBR softened its stance regarding the imposition of penalty on late filers of income tax returns for tax year 2020. Though the apex tax authority has so far not imposed any fine and penalties on filing after due date, the action has been under discussion in the recent past.

“Fines and penalties on late filers are not meant to boost revenue collection and they will be used as a tool to create deterrence against late filers,” Ashfaq Ahmed, member Inland Revenue (Operations) FBR said.

The senior tax official said this during a meeting with the office bearers of Karachi Tax Bar Association (KTBA) to discuss the ongoing filing of income tax returns for the tax year 2020, according to people privy to the meeting.

Ahmed said the individuals who filed their income tax returns after the due date are liable to fines and penalties. “However, the FBR may impose fine on the late-filers on case-to-case basis,” he said.

The last date for filing for income tax return was December 8, 2020, in the case of salaried and business individuals, taxpayers falling under the final tax regime, and companies having a special tax year. However, the last date for return filing in case corporate taxpayers was December 31, 2020.

The FBR did not grant an extension to the last date. And, the revenue body received around 1.8 million income tax returns by December 8. However, the FBR directed all the tax offices to grant extension in date to taxpayers who submit applications to the Commissioner Inland Revenue.

The number of income tax returns increased to 2.4 million by January 15, the tax official said.

Section 182 of the Income Tax Ordinance, 2001 explained the penal amount for late filing of returns.

In case a person fails to furnish a return of income such person will 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 Rs40,000 or no tax is payable for that tax year such person shall pay a penalty of Rs40,000.

“Provided that if 75 percent of the income is from salary and the amount of income under salary is less than five million rupees, the minimum amount of penalty shall be Rs5,000,” read the law.

Similarly, if a person fails to furnish a wealth statement, which is mandatory to file along with the return of income, by the due date then such an individual will pay a penalty of 0.1 percent of the taxable income per week or Rs100,000 whichever is higher.

The tax official informed the KTBA the FBR is taking strict action against non-filers and will initiate prosecution against non-compliant taxpayers.

The KTBA officials said many taxpayers have genuine reasons for late filing. Therefore, the FBR should take a lenient view and withdraw the penalty on returns filed after due date.



Source: The News

Latest News

169.6k Followers
Follow

Related News

Leave a reply

Please enter your comment!
Please enter your name here