Taxpayers advised to update profile to avoid penalty, exclusion from ATL

Taxpayers advised to update profile to avoid penalty, exclusion from ATL

KARACHI: Taxpayers have been advised to update their profile by March 31, 2021 to avoid penalty and exclusion from Active Taxpayers List (ATL).

Sources in the Federal Board of Revenue (FBR) said that the last date for updating the profile was December 31, 2020. However, this date was extended by the FBR up to March 31, 2021 considering the problems faced by the taxpayers.

Through the Finance Act, 2020 a Section 114A was inserted to Income Tax Ordinance, 2001 regarding taxpayer’s profile.

As per the provision, following persons are required to update their profile on IRIS – the official web portal of the FBR:

a. every person applying for registration under Section 181;

b. every person deriving income chargeable to tax under the head ‘income from business’;

c. every person whose income is subject to final taxation;

d. any non-profit organization as defined in clause (36) of Section 2;

e. any trust or welfare institution; or

f. any other person prescribed by the FBR.

Following details are required for updating the taxpayer’s profile:

i. bank accounts;

ii. utility connections;

iii. business premises, including all manufacturing, storage or retail outlets operated or leased by the taxpayer;

iv. types of businesses; and

v. such other information as may be prescribed.

The FBR issued a detailed explanation on the issue stating that complexity of return forms is an embodiment of the complexity of tax law. “Nevertheless, there is a dire need to simplify return forms without compromising on data required to verify accuracy of the declared version.”

The FBR said that instead of endeavoring to obtain all the relevant information in the income tax return, a new section has been added wherein taxpayers’ profile may be prescribed in order to capture data relevant to the taxpayer.

“Person who are already registered before September 30, 2020 and are deriving business income or income subject to final taxation, trust, welfare institutions, non-profit organizations and such other persons prescribed by the board are proposed to file a profile on or before December 31, 2020 (this has been extended up to March 31, 2021).”

The FBR further said that persons who obtain their registration after September 30, 2020 are proposed to furnish such a profile within 90 days of registration. In case of any change in particulars of information, such persons shall update their profile within 90 days of the change in particulars.

“The profile contains information relevant to income regarding bank accounts, utility connections, business premises including all manufacturing, storage or retail outlets operated or leased by the taxpayer, types of businesses and such other information as may be prescribed by the board.”

The FBR said: “If a person fails to furnish or update a taxpayer’s profile within the due date or time period as extended by the FBR under Section 214A of the Ordinance, such person shall not be included in the active taxpayers’ list for the latest tax year ending prior to the aforesaid due date or extended date.”

However, upon filing or updating the profile, such persons shall be allowed to be placed on the ATL upon payment of surcharge which is proposed to be Rs20,000 in the case of a company, Rs10,000 in the case of an association of persons (AOPs) and Rs1,000 in the case of an individual.

“Further, a penalty for non-filing or not updating of profile is also proposed at the rate of Rs2,500 for each day of default subject to minimum penalty of Rs10,000,” the FBR added.

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