December 31 deadline: ''IRIS'' glitches hampering tax returns filing

Certain companies, required to electronically file their income tax returns on or before December 31, are facing serious problems in filing their returns for Tax Year 2015 due to wrong calculation formula of taxes under ''IRIS'' system of the Federal Board of Revenue (FBR). Tax experts told Business Recorder here on Wednesday that the last date for filing of income tax returns for companies is December 31, 2015 while certain companies are registering their complaints with the FBR against electronic system ''IRIS'', but so far no amendment has been made to the ''IRIS'' system.
At present, three different types of taxes are applicable on companies which include one percent turnover tax under Section 113 of the Income Tax Ordinance, 2001, 17 percent Alternative Corporate Tax (ACT) under Section 113C and 33 percent tax on profit under Division II Part II of First Schedule to the Income Tax Ordinance. While filing of income tax returns, the IRIS automatically calculate the highest amount of tax on the basis of formula. Out of these three taxes, the highest tax payable has to be deposited along with the return.
The errors in IRIS is creating serious problems for the corporate sector return filers and whenever attempt has been made to file annual income tax returns, all three taxes have been wrongly calculated for working out the total tax. Due to certain mistakes in the formula, system is automatically combining all three taxes by wrongly applying the formula. So far, the system is still not upgraded and certain companies are still facing serious problems in filing of their returns for Tax Year 2015, tax expert added.
When contacted, official spokesperson of the FBR Dr Muhammad Iqbal, said that the system must pick only highest of three taxes, either 1 percent of turnover tax, 17 percent as alternate corporate tax or 33 percent of tax on taxable profit. If the IRIS is combing all taxes, it is wrong and error needs to be rectified. He said that so far the FBR has not received complaints on the said issue, he added.