Respite: FBR extends deadline for IT returns, wealth statements
Tax collection may fall short of the target because of delay.
The deadline will now be November 30 for filing income tax returns and wealth statements for individuals and companies whose financial year ended on June 30 this year or in December last year. CREATIVE COMMONS
ISLAMABAD:
Despite having a 27,000-strong workforce, the Federal Board of Revenue (FBR) has failed to address administrative problems relating to filing of income tax returns and wealth statements and has extended the deadline for one month.
The deadline will now be November 30 for filing income tax returns and wealth statements for individuals and companies whose financial year ended on June 30 this year or in December last year, according to a circular issued by the FBR on Wednesday.
While there may be some justification for extending the date for individuals who are trying to comprehend new return forms, there is no justification at all for pushing the deadline for companies that closed their financial year in December last year, according to tax experts.
This is the second time that the FBR has extended the deadline. Earlier, it pushed the deadline from September 30 to the end of October after failing to furnish income tax return forms. It has not officially given any reason for the extension this time.
Owing to the delay, monthly tax collection will likely remain far behind the target, as the FBR has included the taxes that taxpayers will deposit along with the returns in its collection estimates. According to statistics for fiscal year 2011-12, income tax filers deposited a meagre Rs14.9 billion with the returns.
The revenue board has already missed its first-quarter target by about Rs15 billion, increasing chances of either revising downward the annual target of Rs2.475 trillion or imposing more taxes.
After falling short of the target, the FBR has ordered the Large Taxpayer Units and Regional Tax Offices to stop paying refunds and is using taxpayers’ money to bridge the gap between actual collection and the target.
Over the years the FBR’s capacity has significantly reduced, giving rise to calls for bringing a tax expert from outside of the board to improve its work. Current FBR Chairman Tariq Bajwa is a grade-21 officer from the District Management Group. According to sources, there has been resentment in the top FBR hierarchy, as some of its members are senior than the chairman.
This is said to have undermined efforts needed to broaden the tax base and improve revenue collection. According to some reports, the government is considering appointing Bajwa chief secretary of Punjab.
Among the reasons behind extension in the deadline for filing tax returns was the FBR’s inability to resolve jurisdiction issues, which arose after changes were made.
It gave the task of sales tax assessment to the field offices where factories were located, but did not change the jurisdiction for income tax. This way, it dealt a blow to the purpose of integrating inland revenue services.
According to officials, the trade and business bodies had also asked for more time to file returns or else they would stop the process, as they were facing problems in comprehending the changes made in the income tax returns and wealth statements.
The FBR finalised the forms quite late that created problems first for the FBR itself and then for the business community. Its inability to swiftly incorporate changes made in the Income Tax Ordinance of 2001 delayed finalisation of income tax return forms.
The businesses were also wary of furnishing Annexure-D seeking every detail of household expenditures and income besides issues in filing the wealth statement, according to a tax lawyer.
Published in The Express Tribune, October 24th, 2013.
Despite having a 27,000-strong workforce, the Federal Board of Revenue (FBR) has failed to address administrative problems relating to filing of income tax returns and wealth statements and has extended the deadline for one month.
The deadline will now be November 30 for filing income tax returns and wealth statements for individuals and companies whose financial year ended on June 30 this year or in December last year, according to a circular issued by the FBR on Wednesday.
While there may be some justification for extending the date for individuals who are trying to comprehend new return forms, there is no justification at all for pushing the deadline for companies that closed their financial year in December last year, according to tax experts.
This is the second time that the FBR has extended the deadline. Earlier, it pushed the deadline from September 30 to the end of October after failing to furnish income tax return forms. It has not officially given any reason for the extension this time.
Owing to the delay, monthly tax collection will likely remain far behind the target, as the FBR has included the taxes that taxpayers will deposit along with the returns in its collection estimates. According to statistics for fiscal year 2011-12, income tax filers deposited a meagre Rs14.9 billion with the returns.
The revenue board has already missed its first-quarter target by about Rs15 billion, increasing chances of either revising downward the annual target of Rs2.475 trillion or imposing more taxes.
After falling short of the target, the FBR has ordered the Large Taxpayer Units and Regional Tax Offices to stop paying refunds and is using taxpayers’ money to bridge the gap between actual collection and the target.
Over the years the FBR’s capacity has significantly reduced, giving rise to calls for bringing a tax expert from outside of the board to improve its work. Current FBR Chairman Tariq Bajwa is a grade-21 officer from the District Management Group. According to sources, there has been resentment in the top FBR hierarchy, as some of its members are senior than the chairman.
This is said to have undermined efforts needed to broaden the tax base and improve revenue collection. According to some reports, the government is considering appointing Bajwa chief secretary of Punjab.
Among the reasons behind extension in the deadline for filing tax returns was the FBR’s inability to resolve jurisdiction issues, which arose after changes were made.
It gave the task of sales tax assessment to the field offices where factories were located, but did not change the jurisdiction for income tax. This way, it dealt a blow to the purpose of integrating inland revenue services.
According to officials, the trade and business bodies had also asked for more time to file returns or else they would stop the process, as they were facing problems in comprehending the changes made in the income tax returns and wealth statements.
The FBR finalised the forms quite late that created problems first for the FBR itself and then for the business community. Its inability to swiftly incorporate changes made in the Income Tax Ordinance of 2001 delayed finalisation of income tax return forms.
The businesses were also wary of furnishing Annexure-D seeking every detail of household expenditures and income besides issues in filing the wealth statement, according to a tax lawyer.
Published in The Express Tribune, October 24th, 2013.