Islamabad, October 24, 2023 – The Federal Board of Revenue (FBR) is expected to stick to the October 31, 2023, deadline for filing the annual return of income for tax year 2023, with no further extensions in sight. This decision follows the recent one-month extension granted by the FBR.
For the tax year 2023, the FBR released income tax return forms as early as July 1, 2023, providing taxpayers with a three-month window to fulfill their national duty. However, the introduction of the upgraded online return filing system, IRIS 2.0, created unexpected challenges for taxpayers, sparking protests from tax practitioners and other stakeholders.
The initial deadline for return filing was set for September 30, 2023, requiring taxpayers, including salaried individuals, business owners, Associations of Persons (AOPs), and companies with special financial years, to submit their annual return of income and asset declarations.
The FBR’s previous success in receiving 4.93 million income tax returns for the tax year 2022 created an expectation that at least a similar number of return filers would be on the FBR’s radar for the tax year 2023. However, sources within the FBR, without providing specific numbers, suggested that the number of filers had been significantly lower than anticipated.
Meanwhile, tax practitioners have contested the deadline extension and called for the FBR to ensure the online system is perfected for return filing. Their argument centers on the idea that once the system is refined and fully operational, taxpayers should be granted the full three-month period, as stipulated by statute, to complete their returns.
The debate over the deadline extension brings to light several key issues in the tax filing process in Pakistan:
1. Technological Transition Challenges: The introduction of the IRIS 2.0 system highlighted the hurdles that taxpayers faced in adapting to new technology and navigating the filing process. A smooth online system is critical for efficient tax return submissions, and the FBR’s ongoing efforts to address these challenges are vital.
2. Stakeholder Concerns: The protests from tax practitioners and other stakeholders reflect the importance of collaborative discussions between the FBR and the tax community. Streamlining the tax return filing process requires close coordination and effective communication.
3. Statutory Timelines: Adhering to statutory timelines for return filing is essential for maintaining tax discipline and revenue collection. Balancing the need for efficient processes with compliance deadlines is a challenge that tax authorities and taxpayers face worldwide.
In conclusion, while the FBR is unlikely to grant another extension for the annual return of income filing beyond October 31, the ongoing dialogue between tax authorities, practitioners, and taxpayers is critical for enhancing the tax filing system in Pakistan. Striking the right balance between technological upgrades, compliance, and statutory deadlines remains a key focus as the nation works towards a more efficient and user-friendly tax return filing process.
Pakistan Achieves Record-High Number of Active Taxpayers at 4.93 Million
