Salman Khan
Salman Khan

ISLAMABAD: The Federal Board of Revenue (FBR) has received nearly 23 per cent less income tax returns for the tax year 2020 compared to the preceding year ahead of the Dec 8 deadline.

The board received 1.31 million tax returns until Dec 5 as against 1.69m returns filed in the tax year 2019. These include both salaried and non-salaried individuals, the association of persons and companies.

The tax received with returns stood at Rs6.5 billion during the period under review as against Rs12.8bn received over the corresponding period of last year, reflecting a decline of 49.2pc.

The last date for filing income tax returns for tax year 2020 was extended since September to facilitate individuals to file their returns.

For the tax year 2019, FBR had received 2.9m returns — the highest number in FBR’s history.

In India, the ratio of return filing to the population is 5pc, 58pc in France and 80pc in Canada. In Pakistan, it stood at nearly 0.02pc.

Special Assistant to Prime Minister on Revenue Dr Waqar Masood Khan told Dawn that it has been decided in principle to not extend the last date further. He said returns filing are increasing day by day.

Dr Waqar said that field formations have been directed to give an extension in timing for filing of income tax returns to those people who could not able to file them before the deadline. He said non-filers of returns will have to submit an application to the concerned tax office for getting extra time for filing returns.

In the same way, the special assistant said that tax practitioners have also been allowed to get extensions for their clients. However, the special assistant said there will be no further extension across the board.

Asked about the penalty, Dr Waqar said that there will be no penalty for those people who sought an extension for the filing of tax returns. He said the decision not to extend further is aim to bring tax discipline in the country.

In the budget 2019-20, the government enhanced 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 metres 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.

The FBR has come up with a number of facilitation measures for taxpayers. The FBR has allowed the filing of tax returns through an online application as well as on computers. The board’s helpline is a free, fast, and reliable service that is committed to provide the very best service to the public.

Published in Dawn, December 6th, 2020

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