FBR to Permit Non-Filers for Hajj and Umrah

FBR to Permit Non-Filers for Hajj and Umrah

Karachi, June 30, 2024 – In a significant policy shift, the Federal Board of Revenue (FBR) will now permit non-filers of income tax returns to travel abroad for performing Hajj and Umrah.

This decision comes under the new provisions of the Finance Act, 2024, which grants the FBR the authority to allow non-filers to undertake these religious pilgrimages.

The change follows a reconsideration of the Finance Bill 2024, which had initially proposed restrictions on non-filers traveling abroad. Previously, the bill suggested the addition of a new sub-section (d) in Sub-section 2 of Section 114B. This would have enabled the FBR, through an Income Tax General Order, to restrict Pakistani citizens from traveling abroad, with certain exemptions. These exemptions included individuals holding a National Identity Card for Overseas Pakistanis (NICOP), minors, students, and other specific categories as notified by the Board.

However, the Finance Act 2024 has now included individuals traveling abroad for Hajj or Umrah in the list of exempted categories. This amendment means that non-filers will no longer face restrictions on traveling for these religious purposes under any Income Tax General Order issued pursuant to Section 114B of the Income Tax Ordinance, 2001.

The original bill had also proposed specific tax rates for advance tax under sections 236C and 236K for late filers. These sections applied to individuals whose names appeared on the Active Taxpayers List (ATL) but had not filed their income tax returns by the due date specified in Section 118, or within extensions granted under Section 119 or 214A. The amended bill, however, introduces a carve-out for those who have filed their returns on time for all of the last three tax years preceding the current tax year in question. This adjustment aims to offer some relief to consistent taxpayers while maintaining the compliance pressure on habitual non-filers.

The decision to allow non-filers to perform Hajj and Umrah reflects the government’s responsiveness to public concerns and the recognition of the importance of these religious duties for many Pakistanis. By incorporating these changes, the government aims to balance tax compliance with the facilitation of religious obligations.

This move has been widely welcomed, particularly among the religious and business communities, who see it as a positive step towards greater inclusivity and fairness in the tax regime. It also underscores the FBR’s evolving approach to tax policy, which now appears more adaptive to the socio-cultural context of its citizens.

As the new provisions come into effect, the FBR is expected to issue detailed guidelines to ensure smooth implementation, addressing any potential concerns or ambiguities. This development marks a significant shift in the FBR’s policy, potentially setting a precedent for future adjustments in tax regulations in response to public needs and feedback.