Pakistan Army has placed an effective mechanism for ensuring filing of tax returns from all personnel who are earning taxable income as the Federal Board of Revenue (FBR) has collected around Rs 400 million per month in shape of taxes from military's accounts.
Responding to a query of tax compliance of Pak Army, Dr Hamid Ateeq Sarwar, Member (Facilitation and Taxpayer Education) Federal Board of Revenue (FBR), informed media at the FBR House on Wednesday that Pakistan Army remained as compliant taxpayer as army officers have contributed around Rs 400 million as income tax per month and they are operating as the best withholding agents in Pakistan.
He said that the army is well aware about the importance of timely filing of tax returns. They are very much cautious about return filing.
Pakistan Military Accounts Department (PMAD) is also playing an important role in deduction and payment of tax from army personals. The PMAD is located in Rawalpindi and PMAD is fully cooperating with the FBR for payment of taxes, Member FATE said.
Hamid Ateeq Sarwar said, "The return filing is considered among prerequisites for granting promotions to army officers and even Chief of Army Staff (CoAS) General Qamar Javed Bajwa filed his return last month much ahead of timeframe for filing of income tax return."
He said that the trend of filing of income tax returns in army is very much high and increasing.
When asked whether army is working as withholding agent on behalf of the FBR, Dr Hamid Ateeq said that the Topi Rakh Complex Rawalpindi is the highest contributor of withholding taxes among all wedding halls. It is one of the largest taxpayers which is accurately deducting and depositing tax in the national kitty. This example clearly reflects about the level of tax compliance of army.
Explaining the relief provided to the salaried class, Dr Muhammad Iqbal, FBR Senior Member Tax Policy Inland Revenue, informed media that the FBR has taken a major facilitative measure to exempt salaried class from payment of minimum penalty of Rs 20,000 and audit on late filing of returns.
Dr Iqbal said that the tax machinery sent out tax notices to over one million tax filers for tax year 2015, 2016 and 2017 who had filed their returns late and offered them to pay 25 percent more or pay 2 percent of their turnover. Now the FBR has waived off penalty for around 350,000 late filers of salaried class.
The FBR has not imposed any new penalty on late filers of returns and it was already part of the income tax law. But an impression has been created that some kind of new penalty has been imposed on salaried class, Dr Iqbal said.
The FBR has issued a notification that says that Board in view of the hardship faced by salaried persons and to encourage and facilitate filers of returns, such persons who have filed return of income under section 114 of the Income Tax Ordinance 2001 declaring only income under the head of "salary" with or without profit on debt and or dividend income are exempted from payment of entire amount of penalty payable by them under section 214E read with entry at serial number 1 of the Table in sub-section (1) of section 182 of the Income Tax Ordinance for the tax years 2015, 2016 and 2017, Dr Iqbal explained.
Dr Iqbal said that the so far the FBR has received 0.95 million income tax returns and if desired, the FBR can extend date for filing of income tax returns, depending on the final number of return filers.
When asked about past audit notices issued to politicians including Prime Minister Imran Khan, the FBR Member said that the FBR cannot disclose personal information of individuals under the confidentiality clause. However, notices issued to politicians for audit have not been withdrawn by the FBR.
Dr Iqbal referred to the same confidentiality clause when asked about issuance of notice to the sister of the Prime Minister.
To a query, Dr Iqbal said that the FBR will refund the amount to the salaried persons who have deposited penalty for late filing of returns.
Responding to a question, the FBR Member said that Department for International Development (DFID) has never linked any grant to FBR with issuance of notices to politicians or a specific class or high net individuals.
Dr Iqbal said that after experiments of parametric selection of cases for audit and random balloting, the FBR is now working on a new plan to frame advance parameters for selection of cases for audit using business intelligence information.
FBR Member (Taxpayers Audit) Nausheen Javaid Amjad said that the Pakistan Revenue Automation Limited (PRAL) central system had issued notices to the late filers of income tax returns for audit without any manual intervention. The notices were served electronically to the taxpayers to avoid manual processes. The notices were issued without any discrimination.
Around Rs 41.63 million tax has been collected form the 2,103 taxpayers who have deposited the tax to avail exemption from audit.
She said that the FBR is working on the new audit policy-2018 which would be issued in due course of time.
To a query, the FBR Member said that the highest number of late filers has been witnessed within the jurisdiction of RTO Lahore, followed by RTO Karachi. Within the jurisdiction of RTO Rawalpindi, around 50,000 late filers filed their returns.
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