KARACHI, February 16, 2024 – In a move to alleviate the burden on salaried individuals and pensioners, the Federal Tax Ombudsman (FTO) has revealed that the newly simplified income tax return form is set to benefit approximately 1.4 million taxpayers.
The FTO initiated an own motion investigation to address the challenges faced by this specific taxpayer segment due to the complexities of the existing tax return format.
According to the FTO report released today, the investigation was triggered under the powers conferred by section 9(1) of the Federal Tax Ombudsman Ordinance, 2000. The analysis of the data provided by the Federal Board of Revenue (FBR) revealed that the current tax return format designed for salaried individuals and pensioners included a total of 34 fields. However, only four of these fields were found to be relevant to the taxpayers earning income from salary or pension, rendering the remaining 30 fields unnecessary for this specific group of taxpayers.
To address the issue and simplify the process, the FBR introduced a new software wizard as a simplified tax return assistant to guide taxpayers through the filing process. Upon analysis, it was discovered that there are at least 66 tabs involved in the return filing process for a taxpayer, including a salaried individual or pensioner. However, further investigation revealed that only about 10 tabs, at most, were required for salaried individuals or pensioners.
Out of the total tabs, seven were related to the income statement, and three tabs were related to the statement of assets/liabilities, including reconciliation. This meant that the remaining 56 tabs were not relevant to salaried individuals and pensioners. Acting on the findings, the FTO directed the FBR to launch a simplified tax return specifically tailored for salaried individuals and pensioners.
In swift compliance with the FTO’s recommendations, the FBR promptly implemented the findings by introducing a Simplified Tax Return for Salaried Individuals and Pensioners. This move is expected to significantly benefit more than 1.4 million taxpayers, reducing the complexity of the tax return process and streamlining it to include only the relevant information for this specific taxpayer segment.
The introduction of the Simplified Tax Return is a positive step towards fostering taxpayer-friendly policies and ensuring a more efficient and user-friendly tax filing experience. This initiative reflects the government’s commitment to addressing the concerns of salaried individuals and pensioners and promoting a more transparent and accessible tax system.
