Karachi, November 22, 2024 – The Federal Board of Revenue (FBR) has issued a strong warning that making false statements in tax filings could lead to severe legal consequences, including up to two years in prison. This reminder is based on the provisions of the Income Tax Ordinance, 2001, specifically Section 195.
The FBR explained that individuals who knowingly or recklessly provide false or misleading information to tax authorities could face criminal charges. Under Section 195(1), anyone found guilty of this offense may be penalized with a fine, a prison sentence of up to two years, or both. Even if a misleading statement is made by mistake, the law still allows for penalties, though the punishment would generally be limited to a fine.
In particular, Section 195(1)(a) outlines that anyone who intentionally provides false or materially misleading information to the income tax authorities is committing an offense. Additionally, Section 195(1)(b) makes it clear that omitting important details that render a statement misleading is also punishable. This is part of the FBR’s broader effort to ensure transparency and integrity in the country’s tax system.
However, the FBR has also made provisions for taxpayers who may unintentionally file misleading statements. Under Section 195(2), individuals will not be penalized if they can prove they had no knowledge, and could not reasonably have known, that their statements were false or misleading. This safeguard is designed to protect honest taxpayers from unintentional errors.
The FBR’s renewed focus on false statements is part of its ongoing campaign to tackle tax evasion and ensure compliance with tax laws. By enforcing stricter penalties for misleading information, the FBR aims to bolster trust in Pakistan’s tax system and improve revenue collection.
Officials also highlighted the importance of Section 182 in the Income Tax Ordinance, which provides further clarity on assessing the accuracy of tax statements. By linking this section to the penalties under Section 195, the FBR aims to remove any uncertainty around enforcement.
The FBR has urged all taxpayers to take extra care when filing their tax returns, stressing that even minor mistakes could lead to serious consequences. It also recommended that taxpayers consult with tax professionals to ensure their filings are accurate and compliant with the law, helping to safeguard the country’s fiscal health.
