Karachi: In a bid to increase the number of income tax returns, the Federal Board of Revenue (FBR) has made mandatory for all salaried persons having taxable income to file income tax returns electronically from Tax Year 2015.
Through SRO 791(I)/2015 issued on Tuesday, the Income Tax Ordinance, 2001 has been amended to make it mandatory for all individuals earning taxable income to file tax return electronically for the tax year 2015, for which the last date is August 31, 2015.
Tax experts strongly criticised the move. They said salaried individuals were a soft target, and by forcing salaried persons for filing returns the tax authorities were trying to achieve their desired number.
Earlier, the law required a person earning Rs500,000 per year to file tax return electronically. While salaried persons under threshold for income tax payment, ie Rs400,000 were also required to file returns, but it was not mandatory through e-filing.
Muhammad Zubair, President, Karachi Tax Bar Association (KTBA) said the changes made by the FBR are disappointing, as this shows they only want to increase the numbers instead of increasing the tax revenue.
He said that a large segment of salaried persons fall in the slab of Rs400,000 to Rs500,000, which also includes the lower cadre of any corporate entity. “In some cases even a peon of an entity will be filing tax return,” he added.
It is pertinent to mention here that a large number of the salaried class already files income tax returns on an annual basis. According to data obtained from a report of Tax Reform Commission, around 881,262 total returns were filed in tax year 2013, out of which salary returns were 235,117.
Rehan Jafri, General Secretary, Pakistan Tax Bar Association (PTBA) criticised the FBR move and asked the authority to first enable its e-portal to handle such a huge number of filings.
He said that the last date of filing the income tax return is August 31 and so far the return forms have not been issued by the FBR. “It will create difficulties for taxpayers to file in a short span of time,” he said, adding the FBR should have issued the form on July 1 allowing at least two months for filing preparation.
The FBR’s new online software for filing income tax returns IRIS (Integrated Risk Information System) was criticised last year for deficiencies. Tax experts believe that without addressing the issues it will be another failure for FBR.
Shahid Hussain Asad, Member Inland Revenue (Policy) and official spokesman said the measure had been taken to ensure electronic availability of taxpayers’ data.
As per tax laws all the individuals are also required to file a wealth statement along with their return.
