Non-filers get ready for suspension of phone, gas, power

Non-filers get ready for suspension of phone, gas, power

The Federal Board of Revenue (FBR) in Pakistan has issued a stern warning to individuals who failed to file their annual tax returns by September 30, 2021.

According to the latest circular, non-filers may face severe consequences, including the potential blockage of mobile phone services or disconnection of gas and electricity.

The FBR, through Circular No. 7 of 2021/2022 (Income Tax), emphasized that there is no consideration for extending the deadline for filing returns. This means that individuals with taxable income must file their returns after the due date, subject to fines and penalties, while also bracing for the harsh actions introduced through the Tax Laws (Third Amendment) Ordinance, 2021.

Broadening the tax base is highlighted as the highest priority for the FBR, and increasing the number of return filers is seen as paramount to boosting revenue. In line with these objectives, a new section 114B has been inserted into the Income Tax Ordinance, 2001. This section empowers the FBR to issue an Income Tax General Order concerning individuals not appearing on the Active Taxpayers List (ATL) but are obligated to file a return under the Ordinance.

The amendment, introduced through the Tax Laws (Third Amendment) Ordinance, 2021, and promulgated via a presidential order on September 15, 2021, grants the FBR authority to take stringent measures against non-filers, including discontinuing the use of mobile phone connections, electricity connections, and gas connections.

The FBR or the relevant Commissioner is also empowered to issue orders to restore the discontinued connections in cases where the return has been filed or the person was not required to file a return of income.

Before inclusion of any individual in the general order, certain conditions must be met: a notice under sub-section (4) of section 114 has been issued; the date of compliance of the notice under sub-section (4) of section 114 has lapsed; and a tax return has not been filed.

This move by the FBR aims not only to ensure compliance with tax regulations but also to encourage individuals to contribute to the country’s revenue stream. The threat of mobile, gas, and electricity services being at risk is intended to serve as a deterrent, urging non-filers to promptly adhere to their tax obligations to avoid potential disruptions in essential services. The FBR’s focus on broadening the tax net remains unwavering, reflecting its commitment to fiscal responsibility and revenue enhancement.