The Federal Board of Revenue (FBR) has announced that filing an incomplete income tax return could lead to severe penalties, including a fine and up to one year of imprisonment.
This new measure, explained in the Finance Bill 2024, aims to enhance compliance and ensure the accuracy of tax filings.
A new Section 191A has been proposed for inclusion in the Income Tax Ordinance, 2001. This section specifically addresses the issue of incomplete income tax returns and outlines the penalties for non-compliance. According to the FBR, the provision aims to penalize any entity that fails to provide complete and accurate information in their tax returns.
The proposed section states: “Prosecution for failure to furnish information in return of income.” It applies to any company, including banking companies and associations of persons, who:
1. Fail to fully state all relevant particulars or information as specified in the form of return, including a declaration of the records kept by the taxpayer.
2. Furnish blank or incomplete particulars or information as specified in the return of income.
3. Attach blank or incomplete annexures, statements, or documents where such annexures, statements, or records were required to be filed.
Entities that commit any of these offenses will be considered to have committed a punishable offense, which could result in a fine, imprisonment for up to one year, or both, upon conviction.
The FBR emphasized the necessity of this measure by stating that incomplete or inaccurate tax returns undermine the integrity of the tax system and hinder effective revenue collection. By imposing stricter penalties, the FBR aims to ensure that taxpayers provide all required information, thereby facilitating more accurate and efficient tax assessments.
Taxpayers, especially corporate entities and associations, are urged to review their filing procedures and ensure that their tax returns are complete and accurate to avoid these severe penalties. The FBR is expected to issue further guidelines to assist taxpayers in complying with the new requirements.
As the new regulations come into effect, the FBR will likely increase its scrutiny of tax filings to enforce compliance. This move underscores the FBR’s commitment to maintaining a robust and transparent tax system in Pakistan.