Missed deadline: Failing to address glitches, govt extends deadline

Income tax returns can now be filed till Sept 30, finance ministry blames sit-ins.

ISLAMABAD:

As authorities fail to address technical glitches on the online portal, the federal government on Thursday extended the date to file income tax returns.

This will deny taxpayers incentives linked with the timely filing of their returns including reduced tax rates.

The date for filing of income tax returns for income earned during fiscal year 2013-14 has been extended by one month to September 30, according to a notification issued by the Federal Board of Revenue (FBR). According to FBR officials, the date was extended after they could not fix issues related to the web portal.



However, the government was quick to blame Pakistan Tehreek-e-Insaf and Pakistan Awami Tehreek for its own faults. The two political parties have staged a sit-in since August 14, demanding ouster of the prime minister over allegations of election rigging.

“It was  impossible to comply with the obligatory provision of filing income tax returns by August 31 due to the prevailing situation because of the sit-ins by the two political parties,” according to a statement issued by the Ministry of Finance.

It added that Finance Minister Ishaq Dar, in view of various representations and pleas submitted by the salaried class, has extended the date of filing the returns by one month. The finance minister took this decision to facilitate salaried persons, it added.

Under the law, it is mandatory for every person to file income tax returns to declare their income and expenditures during a fiscal year. The previous fiscal year ended on June 30.

The government had set August 31 deadline for the e-filing of returns in the case of salaried persons.

By extending the date, the government has infringed upon potential benefits of the active taxpayers, said Dr Ikramul Haq, an economist and tax practitioner. From July this year, the government has introduced drastic changes in tax laws, making it difficult for people to remain outside the tax ambit.

It has introduced higher withholding tax rates for those who do not file income tax returns. Under the law, those who file the income tax returns before or on June 30 each year will be entitled to these benefits that also include privileged cards for highest income taxpayers.

The FBR is bound to update the list of active taxpayers fortnightly once the exercise of filing of income tax returns is completed for a fiscal year.  Vehicle buyers have to pay higher withholding taxes than the specified rates until the government upgrades its active taxpayers list.

Like its predecessor, the PML-N government has been struggling to expand an extremely narrow tax base. Out of 3.544 million people who have valid National Tax Numbers (NTN), only 890,000 filed income tax returns on incomes earned during financial year 2012-13 ended on June 30, according to the FBR.

These persons were assigned NTNs by the FBR only after getting their personal data and hence, can be easily tracked and asked to obey the law.

The 890,000 taxpayers, who chose to obey the law, paid Rs433 billion in taxes, with the corporate sector alone contributing almost three-fourth of the total.

Out of the registered 53,744 companies, as many as 23,179 firms or 43% filed income tax returns and paid a sum of Rs315 billion, according to FBR documents.

The FBR has not taken any action against the rest of the companies that did not file returns. Only 313,005 salaried persons filed income tax on income earned during fiscal year 2012-13. They paid a sum of Rs50 billion in income taxes.

The average annual income tax paid by the salaried class was Rs159,741 per person.

Published in The Express Tribune, August 29^th, 2014.

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