FBR seeks feedback on proposed rules

KARACHI: The Federal Board of Revenue (FBR) has drafted rules to ensure timely issuance of tax returns forms within a week of a new fiscal year and end the tradition of multiple extensions in the filing deadline.

The FBR unveiled the draft of the rules on Tuesday and sought feedback of the stakeholders. The rules explain the process of annual return forms.

Under the proposed rules, the final income tax return form will be ready by January 31 every year. Any amendment through the finance act having retrospective effect will be incorporated in the final draft of return form and available for filing by July 7 every year, according to the rules.

On delay in issuance of return forms, a senior FBR official said the late start of working on return form is mainly due to the budget making process and approval of the finance bill from the parliament by end of June every year.

Zeeshan Merchant, president of Karachi Tax Bar Association said the decision would facilitate taxpayers and help in broadening the tax base.

“Taxpayers have difficulties in meeting the deadline because of non-availability of withholding statements for the relevant tax year,” said Merchant.

Business individuals who close their financial year by June 30 and are required to file monthly sales tax returns for the month by July 18 will face difficulties to initiate return filing from the month of July. Besides, many practical problems surface at the time of filing of return, he added.

Usually, the last date for filing annual income tax return is September 30 for taxpayers including salaried persons, business individuals, association of persons and companies having special year. For companies having a financial year ending on June 30 the return filing date is December 30 every year.

For the last many years, it has become tradition that the delay in issuance comes from the FBR, which compels the tax authorities to extend the date repeatedly. For filing income tax returns for the tax year 2020, the FBR issued finalised return forms by September 8. Unlike the previous years, the tax bars including the Pakistan Tax Bar Association did not ask the FBR to extend the date. Instead, they demanded a statutory time limit of 90 days to taxpayers in filing their returns.

Through an income tax circular dated September 30, the FBR for the first time took a major decision and allowed return filing up to December 8 by providing statutory time limit. “No further extension for filing of income tax returns/statements will be granted,” it said.