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Half a million people pay surcharge to get active taxpayer status

Taxation

ISLAMABAD: Nearly half of a million people have paid surcharge for appearance in Active Taxpayers List (ATL) to get benefit of exempt withholding tax or reduced rate of withholding tax on various types of transactions.

Sources in Federal Board of Revenue (FBR) on Wednesday said that around 500,000 taxpayers who filed their income tax returns after due date had paid surcharge to appear on the ATL for tax year 2020.

The FBR issues a fresh ATL on March 01 every year on the basis of returns filed for the preceding tax year. The FBR issued ATL for tax year 2020 on March 01, 2021. This ATL carried 2.17 million names of taxpayers who filed their income tax returns by due date or those who filed their returns on the date which was extended by Commissioner Inland Revenue (CIR).

The updated ATL – on the basis of surcharge paid by those person who filed their income tax returns after due date –  issued on May 10, 2021 is showing around 2.65 million names of active taxpayers.

The filing of income tax returns is mandatory for all the taxpayers who have taxable income or specified under Section 114 of Income Tax Ordinance, 2001.

As per statute the compliance of mandatory return filing was not enough to avail the reduced rate facility. According to Section 182A of Income Tax Ordinance, 2001 the persons who fail to file annual return of income by due date or extended by commissioner Inland Revenue then their names would not be included in the active taxpayers list for the year for which return was not filed.

However, the persons would be included in the taxpayers list on filing return after the due date, if they pay surcharge at: Rs20,000 in case of  a company; Rs10,000 in case of an association of persons; and Rs1,000 in case of an individual.

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