Mr. Atif Ikram Sheikh, President of FPCCI, has highlighted the technical difficulties and delays in filing income tax returns and recommended an extension of 30 days as a special case scenario to enable the system to handle the enormous volume and flux. The Federal Board of Revenue (FBR) ’s online system has limitations and incapacities, so the commoner’s tax filing system remains cumbersome. He added that the system needs to be fixed for delays and downtimes.
Mr Atif Ikram Sheikh reminded me that FPCCI, being the apex body, has been simplifying the taxation system in general and income tax return forms in particular to facilitate the process. It is in the national interest and interest of the economy to assist as many citizens as possible in filing their returns. He added that the more Pakistan’s economy is inclusive, formal and documented, the more it will be acceptable for external financing from international financial institutions and lenders.
The FPCCI Chief maintained that FBR needs to expedite digitalization for many reasons: minimizing human involvement, saving the time and resources of the return filers, reducing documentation errors, improving systemic and procedural efficiency, and curtailing complaints, anomalies, and discrepancies.
Mr. Atif Ikram Sheikh stated that the FBR and Pakistan Revenue Automation Limited (PRAL) missed important deadlines regarding the issuance of return forms, as given in rule 34A(2)(e), (3), and (4). It is mandated that the draft electronic and manual return forms be released and made available by January 1, 2024. However, the forms mentioned above were issued on June 21, 2024 – a procrastination of more than five months.
Moreover, he maintained that the final return forms should have been notified by January 31, 2024, but they were issued on July 4, 2024 – a postponement of approximately six months. This should be taken into due consideration to ensure fairness.
President FPCCI elaborated that the salaried class has, in effect, already paid all their taxes in advance, as employers deduct their income tax at source. He added that FBR should move decisively to align its system with international best practices and should bother salaried individuals only for reconciliation purposes.
Mr. Atif Ikram Sheikh explained that an extension or a 30-day grace period—without penalties—can go a long way in enhancing compliance with the income tax return filing for the year 2023 – 24. He added that we should look at the bigger picture and respect the legitimate procedural issues faced by tax filers.
