KARACHI: Pakistan Tax Bar Association (PTBA) on Friday requested Finance Minister Asad Umar to withdraw Section 182A of Income Tax Ordinance in the forthcoming Supplementary Finance Bill, 2019 to encourage the potential taxpayers to pay due tax and become part of tax net even after the due dates of filing of return.
The tax bar said that on examination of current Active Taxpayers List (ATL) on the basis of return of income tax filed for the tax year 2017, the total number of active taxpayers is 1,792,630.
It said that the finance minister himself and the government was making all-out effort to encourage bringing every person, who is liable to pay tax into the tax net.
The Federal Board of Revenue (FBR) is also putting time and energy to resolve all long outstanding issues and also amending laws to build confidence of the genuine taxpayers of the country.
The tax bar said that the Finance Act, 2018 assented on May 22, 2018 introduced penal provision of law through Section 182A of the Income Tax Ordinance, 2001 with the object to ensure filing of return of income within the prescribed due date.
However, it is a fact that till due date the total number of returns filed for the tax year 2018 is 1,552,287.
“The provision of law, you would observe that any person, who has or would be filing his return of income in case of individual / AOP after December 17, 2018 and in case of companies after December 31, 2018 would not be included in the ATL for the year for which return was not filed within due date,” the PTBA informed the finance minister.
The tax bar also pointed out penalty under this provision stating that it was very harsh for failure to file return within the due date.
The imposition of penalty under Section 182A of the Ordinance is nothing but levy of double penalty on the existing taxpayers for the same offence.
Article 13 of the Constitution of the Islamic Republic of Pakistan, provides protection against double punishment for the same offence. The superior courts in number of cases held that double jeopardy is unconstitutional, the PTBA said.
It said that the members of PTBA are afraid that in the presence of Section 182A of the Ordinance, we would not be able to persuade any person to file return after the due dates of filing of return, which have already passed.
The tax bar said that the provision of the law instead of encouraging potential taxpayers to become filer; would surely discourage them.
It will be another disaster like the provision of Section 214D of the Ordinance, which created huge pendency of tax audit cases approx. 1.2 million and finally the government created facility for the existing taxpayers by introducing Section 214E of the Ordinance for disposal / closure of such cases in the Finance Supplementary Amendment Act, 2018.