FBR stops updating taxpayers list

KARACHI: The Federal Board of Revenue (FBR) on Monday decided to stop issuing weekly active taxpayers list (ATL), indicating no space for late filers in the ATL and subsequent withdrawal of tax concessions.

Officials said FBR issued last weekly ATL today (Monday) and the exercise will not be continued from March 1 due to change in law. The FBR initiated the issuance of weekly ATL in August 2015 to facilitate taxpayers, who file income tax returns even after due date.

The appearance of name in the active taxpayers list guarantees reduced rate of withholding tax and other tax benefits for taxpayers. The Finance Act 2018 introduced an amendment (a section 182A) into the Income Tax Ordinance 2001 under which if an individual fails to file return of income then his name will not be included in the ATL for the year for which return is not filed within the due date.

The FBR said the provisions would apply from tax year 2018 and onwards for which the first ATL is to be issued on first day of March.

A FBR official said names of taxpayers, who filed their annual returns by due date –December 15, 2018 for all taxpayers and December 31, 2018 in case of companies – would appear on the new ATL for tax year 2018.

The official said since the FBR would stop including the names of late return filers “there will be no need of issuing weekly update of the ATL”. The FBR received 1.55 million returns for tax year 2018 by due date from corporate as well as non-corporate taxpayers.

The last weekly updated active taxpayers list for the tax year 2017 showed that around 1.84 million returns were filed up to February 24. Therefore, it is established that the FBR will lose around 0.29 million return filers for the tax year 2018.

The FBR official said the ATL for tax year 2017 would expire on February 28. Pakistan Tax Bar Association (PTBA) urged the government to revoke the amendment that excludes late filers as it would discourage broadening of tax base.

Abdul Qadir Memon, president of PTBA said the bar members would not be able to pursue any individual for returns filing after due dates in the presence of the section. “This provision of law, instead of encouraging potential taxpayers to become filer, will discourage them,” Memon informed the FBR in a letter.

The Pakistan Tax Bar Association president told The News that the bar urged the finance minister to revisit the policy and withdraw the provision in latest supplementary finance bill or in the upcoming budget.