ISLAMABAD: The Federal Board of Revenue (FBR) will recover a minimum amount of Rs10,000 as a penalty from salaried persons, who failed to file an income tax return during a tax year.

The minimum penalty has been increased from Rs5,000 to Rs10,000.

The changes have been brought through Tax Laws (Third Amendment) Ordinance, 2021, which was promulgated through Presidential order on September 15, 2021. The amendment has been introduced to Section 182(1) of the Income Tax Ordinance, 2001.

According to the amendment, where any person fails to furnish a return of income as required under Section 114 within the due date:

“Such person shall pay a penalty equal to higher of –

(a) 0.1 per cent of the tax payable in respect of that tax year for each day of default; or

(b) rupees one thousand for each day of default:

Provided that minimum penalty shall be —

(a) rupees ten thousand in case of individual having seventy-five percent or more income from salary; or

(b) rupees fifty thousand in all other cases:

Provided further that maximum penalty shall not exceed two hundred percent of tax payable by the person in a tax year:

Provided also that the amount of penalty shall be reduced by 75 per cent, 50 per cent and 25 per cent if the return is filed within one, two and three months respectively after the due date or extended due date of filing of return as prescribed under the law;

Explanation.— For the purposes of this entry, it is declared that the expression “tax payable” means tax chargeable on the taxable income on the basis of assessment made or treated to have been made under sections 120, 121, 122 or 122D.

The following link provides previous penalty amount for not furnishing returns:

Penalty for non-filing tax return and wealth statement

The federal government of Pakistan has introduced an additional advance income tax (AIT) of up to 35% on the consumption of electricity by individuals not appearing on the Active Taxpayers List (ATL).

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ISLAMABAD: The Federal Board of Revenue (FBR) has been empowered under income tax statute to block mobile phones or mobile phone SIMs of persons who have taxable income but remained non-filer of annual return.

The government promulgated Tax Laws (Third Amendment) Ordinance, 2021, and made major amendments to the Income Tax Ordinance, 2001.

As per the amendments, the FBR has been empowered to take strict actions against non-filers, including blocking mobile phones or mobile phone SIMs. Besides, the tax authorities have also powers to give orders to utility companies for discontinuations of electricity connection and gas connection of non-filer.

Section 114B has been introduced through the Tax Law to the Income Tax Ordinance, 2001.

Following is the text of the new Section:

“114B. Powers to enforce filing of returns. — (1) Notwithstanding anything contained in any other law for the time being in force, the Board shall have the powers to issue income tax general order in respect of persons who are not appearing on Active Taxpayers List (ATL) but are liable to file return under  the provisions of this Ordinance.

(2) The income tax general order issued under sub-section (1) may entail any or all of the following consequences for the persons mentioned therein, namely:-

— disabling of mobile phones or mobile phone sims;

— discontinuance of electricity connection; and

— discontinuance of gas connection.

(3) The Board or the Commissioner having jurisdiction over the person mentioned in the income tax general order may order restoration of mobile phones, mobile phone sims and connections of electricity and gas, in cases where he is satisfied that —

(a) the return has been filed; or

(b) person was not liable to file return under the provisions of this Ordinance.

(4) No person shall be included in the general order under sub-section (1) unless following conditions have been met with, namely:-

(a) notice under sub-section (4) of section 114 has been issued;

(b) date of compliance of the notice under sub-section (4) of section 114 has elapsed; and

(c) the person has not filed the return.

(5) The action under this section shall not preclude any other action provided under the provisions of this Ordinance.

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