FBR issues simple tax return form for manufacturers after deadline

KARACHI: The Federal Board of Revenue (FBR) on Wednesday issued a simplified return form for tax year 2020 to facilitate small manufacturers though the date to file this return had already expired a day earlier.

Karachi Tax Bar Association (KTBA) President Muhammad Zeeshan Merchant said the FBR was very late in issuing a simplified return form for small manufacturers. “Interestingly the deadline for filing of return for the Tax Year 2020 has already expired on December 8, 2020 which has not been extended by the FBR despite scores of requests from the business and tax fraternity.”

The FBR issued SRO 1316(I)/2020 dated December 9, 2020 to notify the finalised one-page simplified income tax return form for individuals and association of persons (AOPs) having turnover less than Rs50 million. It was also interesting that the notification dated December 9, 2020 was sans deadline for filing of return as required under section 118 of the Income Tax Ordinance, 2001, he added. He questioned the logic of the notice, as it was of no use for the small manufacturers after the expiry of the due date to file the tax return.

Draft of the simplified return was issued on November 26 to seek input from stakeholders.

Originally, the last date to file returns for tax year 2020 was September 30, 2020 for taxpayers including salaried persons, business individuals, corporate entities having special year etc.

However, this year the FBR finalised the income tax return for all such taxpayers on September 8, 2020, which left less time to comply with return filing.

As per law, a 90 days period was mandatory to comply with return filing, something which the FBR was reminded of by the tax bars.

Considering this the FBR on September 30, 2020 extended the due date by 90 days or up to December 8, 2020 in one go.

However, surprisingly the FBR issued this simplified form for small manufacturers when the due date had already lapsed.

The FBR issued this form to facilitate the small manufacturers in ease of doing business. The form has a fewer entries. Further, the wealth statement attached to this form is also one-pager.

The KTBA president said that though this simplified return was issued for the facilitation of taxpayers, yet it was issued after the expiry of the deadline to file tax returns, and therefore not understandable.