Islamabad: The Federal Board of Revenue (FBR) announced the federal government’s decision to facilitate taxpayers by providing them with a one-time option to close audit proceedings that were initiated due to the late filing of tax returns through the Finance Supplementary (Amendment) Act 2018 — according to a press release from the government authority.
Through the press release, the board also denied reports accusing the taxation authorities of harassment of late filers, especially salaried individuals. The FBR has clarified that an amendment in income tax law made through the Finance Act 2015 by the previous government provided for automatic selection for audit, if a person had not filed income tax returns by the due date stipulated under the law.
This provision has been changed by the current government through the Finance Act 2018. However, the cases that were automatically selected under the former provision prior to its withdrawal are still expected to be audited. This created undue problems for the taxpayers.
Now, the government has decided to provide a one-time option to tax payers to close the audit proceedings due to late filing of returns under supplementary amendments introduced to the law. Under the regulations, the taxpayers have the option to either get their audits closed by paying a 25% higher tax than the tax amount they owed or, in case no tax was payable, 2% of the turnover and to file revised returns.
The salaried individuals whose cases were selected for audit due to late returns were facilitated by this new law, as it exempted them from the requirement of paying 25% higher tax and filing revised returns for closure of their audit cases. However, they did have to pay a certain penalty fee due to delaying their tax filings.
It is worth mentioning that the previous government had fixed the minimum penalty for late filing of returns at PKR 20,000 through the Finance Act 2013, and the current government has made no changes to this particular law as yet.
