No further extension in income tax returns date

ISLAMABAD: After receiving income tax returns from around 0.5 percent of total population, the government has decided for granting no more extension in date for filing of income tax returns.

Now the taxpayers will have to pay minor penalty on the basis of each passing day if they prefer filing of their tax returns after expiry of this last extension. Despite continuous thumping over achieving 20 percent growth in revenue collection so far in first five months of the current fiscal year, the FBR has been facing criticism for its inability to broaden narrowed tax base.

Although, the IMF mission, which concluded talks under post programme monitoring on Thursday this week in Islamabad under Mission Chief Herald Finger, also praised the FBR for achieving 20 percent growth in revenue collection but raised questions over continuous failure for broadening of tax base. One issue which came on the surface was granting of frequent extensions of filing of income tax returns which had now forced the government as well as the FBR to stop this practice. After extending the deadline by four times in the current fiscal year, the FBR has received total 1.07 million tax returns out of total population of 207.77 million in accordance with results of latest population census held across Pakistan in 2017.

“We have so far received 10, 72,000 income tax returns till December 15, 2017 against 8,65,000 received in the same period of tax year 2016,” FBR’s official spokesman Dr Iqbal told The News here on Friday night. However, the FBR had received over 1.2 million tax returns during last financial year 2016-17 as receiving of returns had continued in months ahead and finally the number of total return filers in accordance with active taxpayers list had crossed 1.2 million mark.

However, there is one difference this time as the FBR has taken first step by establishing special zones with the purpose of broaden the tax base. Three dedicated offices have already been established in three major cities and this setup will be replicated in all Regional Taxpayer Offices (RTOs) across Pakistan in the subsequent months of the current fiscal year.

Alone this step will not be sufficient to make any difference until and unless much desired structural changes in tax laws and structure of the FBR were not made for which political will required at highest level of decision making process. First of all, the FBR cannot achieve optimal level without getting full autonomy where chairman and all members of the Board possessed constitutional guarantee of their tenure and having zero interference from political elites and powers of executives.

Second, the government will have to change tax laws to disallow exemptions/waive off on earning any income inside or outside Pakistan and from any sectors of the economy if we want to achieve goal of expanding narrowed tax base otherwise it will remain a pie dream.