Karachi, December 15, 2023 – The Federal Board of Revenue (FBR) in Pakistan has announced significant updates to the Income Tax Rules, 2002, for the tax year 2024, emphasizing that individuals required to file income tax returns will now be considered as registered entities.
The modifications include streamlined procedures for income tax registration, with distinct criteria for various categories of taxpayers.
According to the FBR’s latest directives:
1. Manual Filing by Individuals with CNIC: Individuals holding a Computerized National Identity Card (CNIC) who are required to manually file their return of total income will be automatically treated as registered under sub-section (4) of section 181 of the Income Tax Ordinance, 2001, on the day they submit the return manually.
2. E-filing by Individuals with CNIC: For individuals mandated to e-file their return of total income, registration will be triggered upon successful e-enrollment.
3. Entities (Companies, AOP, Foreign Nationals, Foreign Governments) E-enrollment: Companies, Associations of Persons (AOP), foreign nationals, or foreign governments are considered registered entities when they complete the e-enrollment process.
4. Registration for Non-Compliant Individuals: Individuals with a CNIC who fail to file their return will be registered by the Commissioner, provided the Commissioner, after providing an opportunity to be heard, is satisfied that the individual’s income is taxable and requires the filing of an income tax return.
5. Registration for Individuals without CNIC: Individuals without a CNIC who are required to file their return manually will undergo registration in a manner similar to sub-rules (1) and (4). This can occur either through an application by the individual or if the Commissioner is convinced, after providing an opportunity to be heard, that the individual’s income is taxable and necessitates the filing of a return.
6. Registration for Entities without CNIC: Similar to individuals without a CNIC, companies, AOPs, foreign nationals, or foreign governments will be considered registered entities as per sub-rule (3). This is contingent on the Commissioner, having jurisdiction over the entity, being satisfied, after providing an opportunity to be heard, that the entity requires registration.
The FBR’s move is aimed at enhancing transparency and accountability in the tax filing process, making it easier for individuals and entities to comply with their tax obligations. These changes also provide a standardized framework for registration, ensuring a fair and systematic approach in bringing taxpayers into the national tax net.
As Pakistan enters the tax year 2024, taxpayers are encouraged to familiarize themselves with these updated rules and ensure timely compliance to avoid any penalties or legal consequences associated with non-compliance. The FBR continues its efforts to streamline tax procedures, promote tax awareness, and foster a culture of responsible tax citizenship in the country.
