The Federal Board of Revenue (FBR) has decided to penalise stop-filers of income tax returns and sales tax returns in high-risk cases where units have declared high turnover/income, but stopped filing returns in 2014-15. Sources told Business Recorder here on Sunday that the FBR has communicated a strategy to the Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs) to ensure compliance by the registered non-filers and stop-filers of returns during current fiscal year.
According to the FBR's enforcement plan (2014-15), RTOs/LTUs shall maintain complete lists of registered non-filers and stop-filers supplied by Pakistan Revenue Automation Limited (PRAL), IT arm of the FBR and issue statutory notices to be served through due process of law for filing of tax returns. It is also advised that 'registered stop-filerss' may be bifurcated into at least four categories on the basis of turnover/income declared in the past. The stop filers who had been declaring high turn over/income may be marked as high-risk cases and taken up first on priority basis for enforcement of returns/monthly returns and for recovery of tax payable by them.
Where returns have been received in response to notices, information shall be compiled in terms of (i) total number of returns filed and (ii) total amount of tax paid with the returns.
The FBR said where returns have not been filed after service of statutory notices, 'best judgement assessments' or 'provisional assessments' (as the case may be) shall be made and demand notices along with orders issued to the defaulting taxpayers. The information shall be compiled with reference to (i) Number of best judgement assessments or provisional assessments (as the case may be) made and (ii) Amount of tax charged.
The penal proceedings shall be completed in cases where 'best judgement assessments' or 'provisional assessments' (as the case may be) have been made and penal orders shall be issued to the taxpayers. Information shall be compiled with reference to (i) penal orders completed and (ii) amount of penalty levied.
The FBR said that the recovery measures shall be initiated under the law and the recovery rules to recover the payable tax and penalty. Information shall be compiled with reference to amount of tax and penalty recovered.
For registration of new cases, the RTOs and LTUs would enlist new revenue potential cases on the basis of third party information like electricity, gas, telephone bills, imports, property and motor vehicle purchases, club memberships etc and withholding tax statements, on the basis of guidelines (where relevant) of the plan, complete the requirements for NTN registration and send those cases to PRAL without delay, FBR said.
To deal with the short filers, FBR said that the PRAL will identify cases of short-filers of returns/short payers of tax at the earliest. The RTOs/LTUs shall issue notices to short-filers by February 28, 2015 for removal of deficiencies with follow up action and ensure compliance.
In case, the taxpayer fails to fully comply with the requirements of deficiencies notice, the return shall be treated as invalid and 'best judgement assessment' or 'provisional assessments' (where applicable) shall be made. Assessment proceedings in all such cases may be finalised in stages ie: high revenue yielding cases by March 31, 2015; medium revenue yielding cases by May 15, 2015 and less revenue yielding cases by June 15, 2015 and all others be finalised by June 30, 2015.
If these cases are not finalised by the said deadlines, concerned Commissioner should give reason for delay to the respective Chief Commissioner Inland Revenue, FBR said.
In case of short payment of tax, short amount of tax along with additional tax/default surcharge will be recovered. If still no payment is made, field formations shall initiate and complete recovery and statutory penal proceedings, FBR added.
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