Karachi Tax Bar Association (KTBA) on Tuesday apprised Prime Minister Imran Khan about difficulties in the filing income tax returns and requested for date extension up to December 31, 2021.
KTBA President Muhammad Zeeshan Merchant in a letter sent to the prime minister highlighted the technical errors on the IRIS portal of the Federal Board of Revenue (FBR), which had made it difficult for taxpayers to comply with the return filing last date i.e. September 30, 2021.
The prime minister has also been informed that the tax bar had already approached the FBR chairman on September 21, 2021, for resolving the issue on the IRIS portal. Instead, resolving the technical errors, the FBR is emphasizing it will not extend the date for return filing.
The KTBA informed the prime minister that the amendments made in the Income Tax Ordinance, 2001 (Ordinance), via Finance Act, 2019, wherein a paradigm shift in the Final Tax Regime (FTR) of sections 148, 153, 233 and others were taken and certain specified class of persons/income were shifted to Normal Tax Regime (NTR) in haste with the tax deducted under said sections to be the minimum tax; albeit the Ordinance does not endorse the later.
The first Return of Income under the conceived NTR (with tax deducted as minimum tax) was rolled out for Tax Year 2020 with countless conceptual and calculation mistakes, pre-fixed attributes, and formulae.
The KTBA in its letter dated December 02, 2020, addressed to the then Chairman FBR, had highlighted those glitches and anomalies in the Return of Income; whereas the undersigned had personally traveled to Islamabad to appraise the FBR Officials of those legal inconsistencies. However, those were not resolved and the Taxpayers were coerced to file their tax declarations on flawed methodology.
This time (Tax Year 2021) the Return of Income was notified by the FBR on July 01, 2021 for the sake of fiscal discipline but without resolving the prior discrepancies. Needless to add that the timelines prescribed under Rule 34A of the Income Tax Rules, 2002, were blatantly violated.
The KTBA in its letter dated September 21, 2021 addressed to the worthy Chairman FBR, had again expressed its strong reservations and highlighted several computational errors in the Return of Income. It is, however, yet to grab the attention of relevant officials whereas the closing date for filing of the return is round the corner.
The 90 days time provided under the law to file the Return of Income under section 118 of the Ordinance should only start when a flawless and error-free Return of Income in line with the provisions of the Ordinance is uploaded on IRIS which per-se is yet to be notified let-alone it is habitual at the FBR to amend and modify the Return of Income till last moment without notifying the same to the stakeholders which creates bad impression on the part of the FBR.