In a letter addressed to Federal Board of Revenue (FBR) Chairman Amjad Zubair Tiwana, Pakistan Tax Bar Association (PTBA) President Anwar Kashif Mumtaz expressed concerns regarding the automated system’s continued issuance of income tax notices to deceased individuals and businesses that have ceased operations. Despite these companies informing the taxation body about winding down their businesses, the FBR automated system persists in sending notices.
The PTBA urged the taxation body to upgrade its automated system to alleviate the hardships faced by the relatives of the deceased and companies that have shut down operations, communicating the same to the FBR. The association recommended upgrading the system, proposing that if a notice under Section 117 of the Ordinance, along with the tax return, has been submitted (in the case of the dissolution of an Association of Persons (AOP), winding up of a company, and death of an individual), then no future notice should be issued for filing tax returns. If the department needs to inquire about any information related to the disclosure under Section 117 of the Ordinance, they may issue a notice under Section 117, as necessary.
“We hope you will consider (the recommendation) for the removal of hardship and will save the energy and time of the field officer from this futile exercise,” stated the letter.
Read Tax notices cause stir among small traders
PTBA referenced Section 114 of the Ordinance, empowering the commissioner to issue notices to non-filers who have not submitted their income tax returns for the current or previous tax years. With the implementation of IRIS, certain compliance requirements are purely system-based. As per Section 117 of the Ordinance, a person discontinuing their business should furnish a notice under this section to the commissioner within 15 days from the discontinuation.
Therefore, after the implementation of IRIS, if the taxpayer submits such notice under Section 117 of the Ordinance and files their tax return for that tax year, treating it as a separate tax year for the purposes of this Ordinance, “even in such cases, the system has issued auto-generated notices for future tax years, and the same is creating hardship for the taxpayer who had complied with the provisions of the Ordinance.”
Last week, PTBA President Mumtaz urged businesses and individuals to file their tax returns to increase revenue collection and help the government reduce reliance on debt. However, he noted that the current government’s focus on deploying technology to collect due taxes has remained low.
Published in The Express Tribune, December 28th, 2023.
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