KARACHI: Tax experts have criticised the Federal Board of Revenue (FBR) for not giving legal cover to a scheme under which non-filers are being asked to file income tax returns without paying penalty.

This is a sort of amnesty being given by the FBR to those who had not been filing their tax returns, they observed.

However, in reality a tax officer under section 182 of the Income Tax Ordinance, 2001 could impose a minimum penalty amounting up to Rs20,000 for late filing.

A leading tax consultant, Qazi Kamal said the FBR, through a recent advertisement appearing in a section of media, asked non­filer businessmen and traders to file the returns without paying penalty.

He was highly critical of the approach adopted by the FBR and said that an advertisement or press release has no legal value and an income tax officer will have to operate under the law as a quasi judicial authority.

“Therefore, if the FBR has to offer amnesty to taxpayers it should be through a notification or SRO,” he added.

Kamal further said that under Section 206 of the Income Tax Ordinance 2001, the FBR could issue a circular, notification or SRO which will have legal value and also have statutory force behind it.

The announcement appearing in media in the form of advertisement or press release carries no legal authority, he said.

He further said that people may file their income tax returns in good faith in order to become filers to avoid 0.3 per cent withholding tax on bank transactions and on cash withdrawals of over Rs50,000 from banks.

“The income tax officers, in absence of proper notification, will impose penalties on late filers,” he added.

Another leading tax consultant Ali Rahim said that it seems that the FBR has taken the support of an advertisement to convey the message to non-filers of income tax returns as its authority to directly issue circulars/SROs was recently withdrawn.

“Under the law, the FBR is now not allowed to directly issue SROs but extend a proposal to the Economic Coordination Committee which is authorised to ratify the circular or SROs,” he said.

Syed Rizwan Shoaib, another tax expert, said that the condition laid down by the FBR for filing of income tax return electronically by individuals earning taxable salary is harsh.

He said that many people would not be able to understand how to file their returns electronically and this will discourage them from filing tax returns.

Published in Dawn, August 16th, 2015

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