Karachi Income Tax Bar Association ITBA has demanded temporary suspension of mandatory e-filing of tax returns by corporate taxpayers to give them time to become conversant with the system.
Talking to Business Recorder on Tuesday, Ali Rahim, a former president of the ITBA, said that the new system "is not error-free" and has operational problems not easy for an entirely new user to deal with. He said that till such time as the irritants are removed it would be most appropriate to accept hardcopies and computer discs containing computer data as return filing requirements.
Munawwar Hussain Shaikh, President of ITBA, in a letter to Salman Nabi, Member, Direct Taxes, Federal Board of Revenue (FBR), has apprised him of the difficulties of the corporate taxpayers in respect of e-filing of monthly and annual statements as well as income tax return.
It has been pointed out in the letter that there is no provision of registration of an e-intermediary in the BANXIS software of e-filing, which is being used by Karachi LTU, while the e-cbr software does have an option to register an e-intermediary. Till date, the registration is not possible on this web site.
In the absence of the provisions of e-intermediary resident as well as non-resident corporate taxpayers are unable to avail of the facility of e-filing. Non-resident corporate taxpayers invariably require the services of tax consultants for preparing and filing of the statutory tax returns/statements.
It has been maintained in the letter that after being registered as an e-intermediary the tax consultant/adviser may be able to provide services of e-filing to unlimited number of taxpayers whereas under the current system Nift allows an e-intermediary to register a maximum of five taxpayers. ITBA President has pointed out that for registration as a taxpayer there are a number of issues out of which four are in need of immediate attention.
First, after filling particulars and giving the e-mail address, an email is received for verification of the data and a link to be visited. However, there is a 'general application error' when an attempt is made to visit the link. On the popup window a reference number together with an email address appears on which the error reference is to be sent. The problem is that the response to email, if sent, is never received.
Second, particulars of a director of a company are to be provided for registration by corporate taxpayers. It is noted that in a number of cases the particulars provided do not match and the registration process does not go further. According to PRAL, a computer firm, this is for the reason that the system cross verifies from the master index the data provided at the time of issuance of national tax number indicating director's particulars. It has been advised that updated particulars of the company be emailed to PRAL for inclusion in the master index. In cases where such particulars are sent, no response is received.
Third, for non-resident corporate taxpayers having temporary registration number it is not clear if they can get register for e-filing. Fourth, even today the taxpayers are not able to access designated sites for registration. The ITBA President has noted in his letter that the system, being hurriedly introduced and implemented, "has created a lot of infrastructural as well as technical issues for the taxpayers on the one hand and for the department on the other".
ITBA is of the opinion that a lot of corporate elite is not computer-literate and, therefore, it is desirable that a reasonable time should be provided to them, and to other stakeholders, to become conversant with the system. They must become able to detect faults, errors and problems and be able to report difficulties to FBR. It is necessary for effective implementation of the newly introduced system.
A former president, Rahim, and the sitting president Shaikh said that ITBA is a professional body and would like to assist the FBR. Had the ITBA members taken on board before implementing the new system its implementation would have been smooth, they added.