Karachi, September 17, 2023 – The Federal Board of Revenue (FBR) has taken punitive measures against individuals who have failed to declare their business bank accounts, as per recent reports.
According to sources within the FBR, declaring business bank accounts is mandatory for individuals engaged in business transactions. To enforce compliance with this requirement, the FBR has invoked relevant provisions of tax laws and initiated penalties for those who have not declared their business bank accounts.
The FBR’s directive stipulates that any person who fails to declare their business bank account(s) in their registration application or neglects to amend their registration profile to declare existing business bank account(s) intentionally will be subject to penalties.
As per the directive, such individuals will be liable to pay a penalty of Rs. 10,000 for each day of default from either the date of submission of their registration application or the date of opening the undeclared business bank account, whichever is later. However, if the calculated penalty for each undeclared bank account is less than Rs. 100,000, then the individual must still pay a penalty of Rs. 100,000 for each undeclared business bank account.
It’s important to note that this provision has been in effect since the first day of October 2021. During this period, taxpayers have had the opportunity to update their registration forms to declare their business bank accounts.
The definition of a business bank account is provided under Section 114A of the Income Tax Ordinance, 2001, which states that every taxpayer is required to declare to the Commissioner the bank account they use for business transactions. The declaration of a business bank account can be done through the original or modified registration form as prescribed under Section 181 of the Ordinance.
This move by the FBR underscores the government’s commitment to ensuring transparency and compliance in financial matters and taxation. It serves as a reminder to individuals engaged in business activities to fulfill their legal obligations by declaring their business bank accounts in a timely and accurate manner. Failure to do so may result in penalties and legal consequences.