Revenue board to issue Active Taxpayers List 2017 next week

KARACHI: The Federal Board of Revenue (FBR) will issue the Active Taxpayers List (ATL) for the tax year 2017 next week, making return filers for the tax year 2016 disable for availing reduced rate of withholding tax rates on different transactions. Officials on Saturday said the revenue body will issue the ATL-2017 on March 1 and will display the names of those individuals and companies, who have submitted their annual tax returns for the tax year 2017 till February 28, 2018. According to the FBR, around 1.24 million people have filed their annual income tax returns for the tax year 2017 by February 15, while the ATL updated on February 22 shows 1.41 million return filers for the tax year 2016. On the basis of the current data around 170,000 non-filers will not appear on the fresh ATL and will lose the benefit of reduced withholding tax rates. To encourage tax compliance, the government introduced higher withholding income tax rates through the Finance Act 2015 applicable on various transactions to increase the cost for non-filers. With the passage of every year, the scope of higher tax rate expanded for non-filers, which resulted in higher number of return filers. At present, higher withholding tax rates for non-filers are applicable on various transactions, which included capital gains on disposal of securities; imports; dividend; profit on debt; investment in sukuks; payments to non-residents; payments for goods or services; income from property; prize and winnings; petroleum products; CNG stations; brokerage and commission; motor vehicle tax; banking transactions; sale and purchase of property, etc. Tax managers estimate another 2.5 million tax returns would be filed for the tax year 2017 after the issuance of ATL on March 1. A tax official said every year taxpayers file their returns even after the deadline and issuance of ATL for availing the reduced rates of withholding tax. On the basis of estimates, the returns filing for tax year 2017 may exceed 1.5 million. A cursory analysis of latest ATL for the tax year 2016 reveals that a large number of corporate entities, Association of Persons (AOPs) and individuals are filing annual returns in order to have their share in the ongoing China- Pakistan Economic Corridor (CPEC) projects and government contracts, where the condition of active taxpayers is mandatory. The tax official said the FBR has allowed reduced rate of withholding tax at 0.4 percent on non-cash transactions only applicable on non-filers till June 30, 2018. “In case the tax rate is restored to actual rate of 0.6 percent from the next fiscal year, a bulk of returns will be received for the tax years 2017 and 2018,” the official added.