ISLAMABAD: Nearly 81,000 individuals have deposited Rs1.67 billion in penalties and higher taxes to avail the government’s amnesty scheme for the closure of automatic audit, Dawn has learnt through knowledgeable sources.

The last date of the scheme was Feb 28, which was already extended by two months. The scheme was originally announced for Dec 31, 2018.

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An official source told Dawn that as many as 613,213 non-salary audit cases are still pending after the due date of the amnesty scheme. These individuals will have to face normal audit procedures, the official said.

But it will be a big challenge for the Federal Board of Revenue (FBR) to prosecute such a huge number of audit cases owing to human resource problems and the government will have to offer some scheme to facilitate these individuals.

The FBR issued electronic audit notices to as many as 1,035,875 late filers since Nov 14, 2018 with a deadline to provide records, documents and books of their accounts. These taxpayers had submitted their returns for tax years 2015, 2016 and 2017 after the deadlines had passed in the respective tax years.

These cases included 342,314 salaried individuals and 693,561 non-salaried individuals including association of persons (AoPs) and companies.

The cases of 342,314 salaried individuals selected for automatic audit for late filing were settled without collecting penalty amount of Rs20,000. The penalty amount collected in few cases from salaried individuals will be adjusted against their tax liabilities in the current tax year.

For the non-salaried 613,213 individuals, the FBR had earlier given a deadline until Dec 31 which has now been extended to Feb 28.

The data available with Dawn showed that of the Rs1.67bn deposited under section 214E of the scheme, the payments include a penalty amount of Rs593.6 million and approximately Rs1.08bn under other heads.

The city-wise settlement shows that Karachi has emerged the major beneficiary of the scheme. Around 24,430 individuals from the metropolis have availed the scheme by depositing an additional amount of Rs563.26m to close their audit cases.

Where as many as 18,709 individuals in Lahore closed their audit cases by depositing Rs473.15m. In Islamabad, 4,391 individuals paid Rs139.23m.

In Faisalabad, 5,206 individuals paid Rs76.96m, in Peshawar 2,364 individuals paid Rs71.68m where as in Quetta only 1,224 individuals opted the scheme by paying Rs14.17m.

In Hyderabad, 4,952 individuals deposited Rs76.03, followed by 3,526 in Sukkur who paid Rs38.84m.

In Faisalabad 5,206 paid Rs76.96m; followed by 3,479 in Multan Rs53.8m, 2,466 in Rawalpindi deposited Rs45.04m; 2,467 people in Sahiwal paid Rs24.9m; 2,030 in Bahawalpur paid Rs24.6m; 1,709 in Sialkot availed the scheme by paying Rs24.6m; and 1,058 in Sargodha deposited Rs13.19m, respectively.

In Khyber Pakhtunkhwa besides Peshawar, 721 individuals in Abbottabad paid Rs12.65m. There are 36 individuals who paid an amount of Rs0.967m who were not associate with any city.

Under the Finance Supplementary (Amendment) Act 2018, non-salaried individuals, AoPs and companies have an option to get their audits closed on the payment of either 25pc higher taxes than the tax paid with the return or in case no tax was payable 2pc of the turnover and to file revised return by Feb 28.

An amendment in income tax law was made through Finance Act 2015 by the previous government that provided for automatic selection for audit if an individual had failed to file returns by the due date.

Published in Dawn, March 24th, 2019