FBR mulls extension in returns deadline, awaits approval to amnesty

KARACHI: The Federal Board of Revenue (FBR) is mulling another extension in the deadline for the filing of income tax returns as the draft of a proposed amnesty on undeclared income is yet to be approved by the parliament, sources said on Tuesday.

The government revised the returns filing dates several times and finally to January 31. 

The sources said the government is willing to give concessions to the traders, opting for the new taxation package under the voluntary tax compliance scheme, in the returns filing for the tax year 2015.

“But, the government has not been able to convince both the parliamentary committees on finance into ratifying the tax scheme,” the source said. “The ratification is unlikely till January 31, which is the last date for filing tax returns.”  

Out of 2.8 million traders in the country, only 625,000 traders file tax returns.

Recently, the government introduced a bill into the National Assembly, seeking implementation of a four-year tax amnesty scheme that proposes permission to traders to whiten their undeclared profits and gains by paying a nominal tax.

The bill proposes that traders could whiten their undeclared working capital of up to Rs50 million by paying one percent tax in tax year 2015.

The bill, known as the Income Tax (Amendment) Bill 2016, tabled by Finance Minister Ishaq Dar, aims at ending a deadlock between the FBR and businessmen over the issue of withholding tax on banking transactions by non-filers. 

The voluntary tax compliance bill aims to bring 2.20 million into the base of filers.

At present, there are hardly one million taxpayers, out of a population of 200 million.

Non-filers have to pay 0.3 percent tax on a banking transaction above Rs50,000.

The amnesty scheme, however, will apply to the both non-filers and filers of income tax returns.

The non-filers could be anyone who did not file any income tax return over the past 10 years.

The scheme will come into force after an approval by both the houses of parliament, which will also decide the deadline for filing of tax returns for the year 2015.

Sources said FBR might also launch an awareness campaign to educate the traders of the benefits of being filers. “However, no decision has been taken in this regard as yet,” said a source.

Meanwhile, Pakistan Tax Bar Association has expressed concerns over the new taxation package for traders.   It said the scheme should be extended to sales tax to bring all businesses under its umbrella.