Karachi, July 14, 2024 – The Finance Act 2024 introduces stringent measures to curb the practice of filing income tax returns after the due date, signaling a significant shift in Pakistan’s tax compliance landscape.
As the income tax return filing season for the tax year 2024 commences, taxpayers are urged to note the critical changes. The deadline for salaried individuals, business owners, Associations of Persons (AOPs), and companies with a special accounting year is September 30, 2024. Companies following the fiscal year accounting period have a different deadline.
Tax experts from KPMG Taseer Hadi & Co. highlighted the legal amendments aimed at enhancing compliance. The Finance Act 2019 introduced Section 100BA and the Tenth Schedule to the Income Tax Ordinance, 2001, outlining provisions for the collection or deduction of advance income tax, computation of income, and the corresponding tax obligations for individuals not listed on the Active Taxpayers List (ATL).
The Finance Act 2024 expands the Tenth Schedule’s scope to include those who appear on the ATL but fail to file their returns by the due date specified in the Income Tax Ordinance, 2001, or as extended by the Commissioner of Inland Revenue or the Federal Board of Revenue (FBR). This amendment aims to eliminate the culture of late filing, increasing the number of timely filers and maximizing compliance.
“The new measures are designed to enforce timely filing and discourage the habit of filing returns past the due date. By introducing the concept of late filers alongside non-filers, the government seeks to enhance tax compliance,” explained a tax expert from KPMG Taseer Hadi & Co.
This development underscores the government’s commitment to strengthening tax administration and ensuring a broader taxpayer base. The enhanced penalties for late filers are expected to incentivize timely compliance and streamline the tax collection process.
As taxpayers navigate these new regulations, it is crucial to adhere to the specified deadlines to avoid penalties and ensure smooth tax filing. The Finance Act 2024 represents a proactive step towards reinforcing the integrity of the tax system and promoting fiscal responsibility among taxpayers in Pakistan.