Three percent advance tax on non-filers: Tax authorities must coordinate to enforce Sec 147: experts

The Federal Board of Revenue (FBR) and provincial revenue authorities/board require immediate co-ordination for enforcement of Section 147 of the Income Tax Ordinance, 2001 for levy of 3 percent advance tax from non-filers of income tax returns where they are filing sales tax returns on services with provinces. Tax experts told Business Recorder on Monday that so far the provincial revenue authorities/board have yet not incorporated the relevant columns in their monthly sales tax returns to collect advance tax from sales tax registered persons. The enforcement of such provision is not possible till the FBR and provinces coordinate for collection of the tax from non-filers of returns.
The question also arises that whether the provincial revenue authorities/board have to issue notices to the non-filers of returns, who are filing monthly sales tax returns with provinces, they added. According to the FBR, a new Section 147A was inserted in the Income Tax Ordinance for levy of advance tax on the person who is a non-filer but is registered for the purpose of sales tax on services with any of the provincial revenue authorities. The new section provides that such person shall pay advance tax @ 3 percent of the turnover declared with the provincial sales tax authorities on monthly basis at the time of filing sales tax return with provincial authorities. The advance tax paid u/s 147A shall be adjustable at the time of filing return.
Advance tax u/s 147A is payable by a person who is a non-filer as on June 30 of the previous year. For example, any person who is non-filer as on June 30, 2016 shall be liable to pay monthly advance tax u/s 147A up to June 2017 irrespective of the fact that he files return subsequently before June 30 2017 for inclusion of his name in the ATL, the FBR added.