The front desks of Lahore office of the Federal Board of Revenue (FBR) are crowded with a large number of clients, applying for National Tax Number (NTN) and filing their income tax returns. The scheduled deadline has been extended from August 31 to September 30.

"This rush for getting NTN has never been observed in the past," says a data entry operator sitting on the main desk of the FBR office in Lahore. "At an average, 150 people are approaching us daily," he says.

The policy for fiscal year of 2015-16 has been changed to motivate taxpayers to file returns. The government announced an Active Taxpayers List (ATL) that linked many incentives and penalties in different types of financial transactions. It offers benefit to the people whose names appear in the ATL.

Traders are strongly opposing the imposition of withholding tax on bank transactions carried out by non-taxpayers, while salaried persons are worried about their returns for the first time.

Karamat Hussain, a small businessman visiting the FBR office to get his NTN, tells TNS that the massive campaign and certain conditions on financial transactions have urged him to file a tax return. However, he finds the procedure of submitting documents slow and complicated. "We are also worried about the next policy because in our country rich people and the ruling elite pay less tax while, because of the external pressures like IMF, common people suffer more."

HM Javed, a young tax lawyer, who is accompanying his clients to the FBR office, says, "More people are coming to get NTN and file their returns but this year the FBR has complicated the form by making wealth statement compulsory for every taxpayer. Previously, it was easy for someone to file returns on his own but now added columns and conditions demand some care in filing returns."

Javed says people have reservations about the tax system where there are disparities. The ATL of the last year, he says, has been provided to the excise and taxation departments and banks.

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He says salaried persons can file returns online but the form is complicated and needs guidance.

In a bid to increase the number of income tax returns, the FBR has made it mandatory on all salaried persons having taxable income to file income tax returns electronically from 2015 onwards. For the purpose, the Income Tax Ordinance, 2001 has been amended to make it mandatory for all individuals earning taxable income to file tax returns electronically for the tax year 2015, for which the last date was August 31, 2015.

Earlier, the law required a personal earning of Rs500, 000 per year to file tax returns electronically. While salaried persons under the threshold for income tax payment, i.e, Rs400,000 were also required to file returns, but it was not mandatory through e-filing. The changes show that the government wants to increase the number of taxpayers rather than collecting more revenue because the tax of salaried persons is already deducted through companies in which they work.

According to some published reports, the number of people filing tax returns has gradually increased in the past couple of years. It is said that less than one per cent of the total 180 million population files income tax returns regularly.

For the past few weeks, country’s traders associations are also protesting against the imposed withholding tax and penalties on financial transactions on not submitting tax returns.

The traders, during a protest outside Punjab Assembly last Wednesday, termed this withholding tax law as a "black law" to get more money from the small business community rather than making tax system transparent in the country.

"Some people are clueless about submitting tax returns because of the new conditions. They have reservations on the existing tax system, too, but these penalties are forcing them to become part of the tax documentation," says Muhammad Shamas Abideen, a member of Karachi tax Bar, talking to TNS via phone.

Abideen says though these policies would improve the tax situation of the country in coming years by bringing more people into the tax net but people also fear exploitation by the government to increase the percentage of taxes in different terms.

He believes tax collection and documentation is a long process. He urges the salaried persons to file their tax returns on an annual basis because their tax is already deducted but not counted in the ATL because of not depositing annual tax returns. "They can get benefits by filing the tax returns and being part of national documentation," he adds.

Zeeshan Ali, another young lawyer having a busy schedule these days, says people have panicked because we as a nation are not accustomed to filing tax returns. "Traders don’t want to expose their wealth and income and that is why they are resisting these conditions. They also fear audit and accountability in future for filing returns properly."

This issue can be handled by making a transparent system of tax collection.