Karachi, September 18, 2024 – In a significant development, the Federal Board of Revenue (FBR) has unveiled comprehensive amendments to the rules governing the Active Taxpayers List (ATL).
The FBR, through the issuance of SRO 1448(I)/2024, has introduced sweeping changes to Rule 81B of the Income Tax Rules, 2002, in an effort to streamline tax compliance and enhance transparency in Pakistan’s taxation system.
The ATL serves as a vital tool for taxpayers, allowing them to avail reduced rates of withholding tax on various financial transactions. In the new draft amendments, the FBR has simplified the language and procedure surrounding the inclusion of taxpayers in the ATL, ensuring greater clarity and precision.
One of the key amendments is the substitution of the existing wording in Rule 81B, sub-rule (1), which now mandates that the ATL will be published under section 181A of the Income Tax Ordinance. This ensures that taxpayers clearly understand the conditions for inclusion in the list.
Under the new sub-rule (2), taxpayers will only be added to the ATL if they have filed their income tax returns by the due date specified in section 118, or if an extension has been granted under section 119 by the Commissioner or the FBR under section 214A. This step is intended to encourage timely compliance from all eligible individuals and businesses.
Furthermore, the newly introduced sub-rule (2A) stipulates that taxpayers who file their returns after the due date will only be added to the ATL upon payment of a surcharge, as outlined in section 182A of the Income Tax Ordinance. This surcharge serves as a penalty for late submission while still allowing taxpayers to access the benefits of being listed on the ATL.
In another notable shift, the FBR has moved from weekly to daily updates of the ATL. Previously, the list was updated every Sunday at midnight, but now the updates will occur on a daily basis, ensuring that newly compliant taxpayers can promptly benefit from their inclusion.
The amendments also provide clarity on the inclusion of companies or associations of persons that were incorporated after the 30th of June of the relevant tax year. Such entities will automatically be added to the ATL, further simplifying the process for newly formed businesses.
Lastly, the changes ensure that taxpayers in Azad Jammu and Kashmir and Gilgit-Baltistan, who file their returns with local tax authorities, will also be included in the ATL, provided their addresses are registered in these regions.
These reforms mark a pivotal step towards creating a more efficient and transparent tax system in Pakistan.
