ISLAMABAD: Pakistan Tax Bar Association of Pakistan (PTBA) has asked Federal Board of Revenue (FBR) to upgrade its system to avoid issuance of notices to the deceased persons under the ongoing exercise against non-filers of income tax returns.

Recently, the FBR has issued a Standard Operating Procedure (SOP) for deregistration of National Tax Numbers (NTNs) and sales tax registration numbers (STRNs) of deceased taxpayers.

The Federal Tax Ombudsman (FTO) has recommended that the FBR is required to revisit the entire scheme of deregistration of deceased persons and formulate a dedicated SOP in this regard specifically removing any system based glitches that hamper the deletion of NTN/ Registration despite legal orders having been made in IRIS by the concerned IR authority.

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A letter of the PTBA to the FBR Chairman said: “refer to the section 114 of the Income Tax Ordinance whereby the Commissioner is empowered to issue notice to non filer who has not filed his income tax return for the current tax year of any previous tax year.”

After the implementation of “IRIS” certain compliance requirements are purely system-based. As per section 117 of the Ordinance which clearly stipulates a person discontinuing his business will furnish a notice under this section to the Commissioner within 15 days from the discontinuation.

Therefore, after the implementation of “IRIS”, if the taxpayer submits such notice under section 117 of the Ordinance, and files their tax return for that tax year treating it as a separate tax year for the purposes of this Ordinance, even in such cases the system has issued auto-generated notices for future tax years and the same is creating hardship to the taxpayer, who one way or the other had complied with the provisions of the Ordinance.

It has been recommended that the system may be upgraded and if notice under section 117 of the Ordinance along with the tax return has been submitted (in case of dissolution of AOP, winding up of company and death of an individual), then no future notice should be issued for filing of tax return and if the department needs to inquire any information related to the disclosure under section 117 of the Ordinance, they may issue notice under Section 117 of the Ordinance, as the case may be.

This should be considered for the removal of hardship and will save the energy and time of the field officer from this futile exercise, PTBA added.

Copyright Business Recorder, 2023