In a move to facilitate return filers, Federal Board of Revenue (FBR) has asked the field formations to establish help desks to receive income tax extension requests manually.
The notification came ahead of the last date with a clear decision that no further general extension in the date will be granted to file income tax returns after Dec 8. Government officials made it clear that they wanted to change the culture of extensions which people in Pakistan were used to on income tax filing.
On Monday, FBR, in its notification, instructed the chief commissioners of Large Taxpayers’ Offices, Medium taxpayers’ offices, Corporate tax offices and Medium tax offices to set up help desks in the respective field formations. The facility will be available until December 10 for the manual reception of extension requests.
The establishment of help desks came through after requests from Pakistan Tax Bar, various chambers of commerce & industry, trade bodies, and sections of print and electronic media. The subject of these requests was either the extension of the last date for filing of income tax returns for Tax Year 2020 or the process of seeking extensions from the commissioner under section 119(1) of the Income Tax Ordinance, 2001, be rendered facilitative.
As per FBR’s directive, every Inland Revenue field formation would establish a Help Desk to receive manual requests for extension; One request for extension addressed to Chief Commissioner Inland Revenue concerned could cover multiple taxpayers provided it contains taxpayers name, their CNIC/NTN, and identification of jurisdiction-to the extent possible.
The notification also stated that option for filing of online request for extension would also be available and can be availed to the maximum degree and that extension would be granted to the extent possible. Chief Commissioners are instructed to ensure proper receipt of all requests, grant of extensions, and report the number of requests received, and the extensions granted by Dec 10.
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The FBR has received approximately 18% less income tax returns for the tax year 2020 compared to the preceding year. The FBR received 1.4 million returns until Dec 7 as against 1.7m returns filed in the tax year 2019. These include both salaried and non-salaried individuals, the association of persons and companies.
In the budget 2019-20, the government enhanced the penalty rate to Rs40,000 from Rs20,000, where any person fails to furnish a return of income. Under the World Bank funded project, one of the targets set for Pakistan is to enhance the filing of income tax returns to 3.5m until 2023.
The bigger challenge for the FBR this year is to cross last year’s tax returns margin let alone record growth over the previous year returns.
Under the law, the filing of tax return is mandatory for all those people who possess house of more than 500 square meters and a car of over 1,000cc. It is also mandatory for all commercial and industrial consumers of gas and electricity to be on active taxpayers list.