KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI), the apex trade body of the country, has urged the tax authorities to give statutory time for filing tax return after removing all errors in the return form.
“Proper legal time for compliance should be granted as per the statute after resolving all problems in the tax return forms,” said Suleman Chawla in a letter sent to Asim Ahmad, chairman, Federal Board of Revenue (FBR).
READ MORE: FBR advised to extend tax return filing date for three months
The apex trade body pointed out numerous errors and mistakes in the return forms on the Iris – the online filing portal of the FBR – both technical, related to IT, and legal.
Due to the technical errors the tax filers are reluctant to pay undue taxes, and their consultants remain unable to file the returns, the FPCCI said in the letter sent on September 24, 2022.
“It is regretful to note that none of the issues have been addressed as yet and, therefore, the pace of compliance of filing the tax returns is very slow,” Suleman Chawla said.
READ MORE: PTBA suggests measures to resolve refund adjustment ahead return filing deadline
The FPCCI highlighted the following issues in its letter to the FBR chairman:
Column for adjustment of brought forward capital losses under the head of capital gains tax is not available in income tax returns form due to which tax on capital gain cannot be calculated correctly.
The column of tax credit for specified industrial undertaking under section 65G of the Income Tax Ordinance, 2001 is inadvertently available in the tax credit annexure of income tax return for salaried individuals, which has no correlation with such tax credit.
READ MORE: Penalties for failure to file return tax year 2022 within due date
Column for adjustment of brought forward capital losses under the head of capital gains is not available in Income tax return form due to which tax on capital gain cannot be calculated correctly.
The Column of tax credit for specified industrial undertakings u/s 65G of the Income Tax Ordinance, 2001 is inadvertently available in the Tax Credits Annexure of income tax return for salaried individuals, which has no correlation with such tax credit.
Although the rate of tax on contract receipts under section 153 was reduced from 7.5% to 7% for Tax Year 2022, however, there is no column for such reduced rate in the return for the TY 2022 available on IRIS.
The draft of manual return forms for the Individuals and AOPs for the Tax Year 2022 was issued belatedly on August 26, 2022, whereas the final SRO. 1733(1)/2022 was issued on September 13, 2022 meaning thereby only 17 days of time has been allowed to file the manual returns, which is insufficient as provided under the law.
READ MORE: FBR fails to remove return filing glitches; KTBA seeks legal time
The IRIS portal is calculating incorrect tax liability on gain on sale of immovable properties in violation of section 37(1A) of the Income Tax Ordinance, 2001 which needs to be taken care off as soon as possible.
The IRIS portal is calculating incorrect tax on profit/yield on Bahbood Certificates/ Pensioner’s Benefit Account/ Shuhada Family Welfare Account in violation of clause (6) of Part-III, 2nd Schedule of the Income Tax Ordinance, 2001, which provides that tax shall not exceed 10 percent of such Profit/ Yield.
There lies no option list in drop downs country and currency under Code “7006” having description “Investment (Non-Business) (Account / Annuity / Bond / Certificate / Debenture / Deposit / Fund / Instrument / Policy / Share / Stock / Unit, etc.)” due to which a taxpayer remains unable to file the Foreign Income & Assets Statement under section 116A(1) of the Ordinance.
Opening wealth is being shown in “Reconciliation of Net Assets” Value of opening net assets is being shown under code ‘703002’ despite the fact that the taxpayer’s residency status is selected as “non-resident” for Tax Year 2022 after which, he should not be required to file the wealth statement including reconciliation of net assets.
The withholding rates on payment of Dividend @ 7.5%, 15% and 25%, (under section 150 of the Ordinance) are appearing in the Income Tax Return Form of “Income for a person deriving income only from salary and other sources and the Column Code 64330052 (Dividend u/s 150 @25%) is missing.
Proviso was inserted under section 22(2) of the Tax Ordinance by Finance Act, 2020 whereby depreciation on additions to fixed assets made after 01-Jul-2020 would be reduced by 50% However, when entries related to written down values are entered in in depreciation schedule as opening values, the IRIS is calculating depreciation at 50% on total values.
In addition to above, what lately has been done by FBR is that it has deleted the column of “Adjustment of Refunds”, which is certainly an afterthought while the Manual Tax Returns, which were issued vide SRO 1612(I)/2022 dated 26 August, 2022 do retain the “Column of Tax Return Refund”. There is no explanation or justification for this glaring disparity, which is to be taken care of the clarification of Taxpayers.
Online Refund Adjustment Column is still not available on Return loaded on IRIS irrespective of the fact that it is available in the SRO issued by Board.
Profit on debt/interest income on government securities is subject to FTR
