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Notices of audit/penalty to late filers for the last three years, threat to exclude non-filers from Active Taxpayer List (ATL) for one year and a forceful campaign are the three major reasons for the 30 percent increase in filing of income tax returns during Tax Year 2018 as compared to Tax Year 2017. This was stated by well-informed sources in the Federal Board of Revenue (FBR).
Threat to exclude those no longer eligible to file returns from the ATL that would compel them to pay a higher withholding tax consist of existing filers, sources confirmed. The FBR had issued audit/penalty notices to late filers of income tax returns for tax years 2015, 2016 and 2017. The timing of notices was November 2018 when people were filing returns for Tax Year 2018 which forced the habitual late filers to ensure timely filing of returns for Tax Year 2018.
Sources in the FBR argued that the awareness campaign in media and enforcement at the level of field formation forced non-filers to file returns - a claim that is not backed by data.
The FBR has received 1.4million income tax returns during Tax Year 2017-18 after it extended the deadline for filing returns three times. The number of return filers is expected to rise after the compilation of data is completed.
Sources added that the FBR is in the process of drafting a very simple income tax return forms which would facilitate filing of income tax returns.

Copyright Business Recorder, 2018

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