In Pakistan, taxpayers are currently fervently seeking inclusion in the recently unveiled Active Taxpayers List (ATL) to shield themselves from the stringent measures enforced by the Federal Board of Revenue (FBR).
The FBR took a decisive step on March 1, 2024, by releasing the new ATL, featuring the names of individuals and corporate entities that dutifully filed their income tax returns for the tax year 2023 by the stipulated due date or by February 29, 2024, accompanied by the payment of default surcharge.
The freshly issued ATL showcased the names of 3.35 million active taxpayers, a notable decrease from the 5.73 million recorded for the tax year 2023, representing the highest return filing in the nation. The deadline for filing income tax returns for the tax year 2023 was initially set for September 30, 2023. However, Circular No. 4 of 2023-24 extended this deadline to October 31, 2023, allowing those who filed within this timeframe to secure a place in the ATL 2023.
Taxpayers who filed their returns after the due date found themselves absent from the ATL 2023. To rectify this, many rushed to pay the default surcharge, which varied based on the taxpayer’s category: Companies were charged Rs 20,000, Associations of Persons Rs 10,000, and Individuals Rs 1,000.
FBR authorities anticipate a significant increase in the ATL 2023 as a result of rigorous actions taken against non-filers and those absent from the list. According to Section 114B of the Income Tax Ordinance, 2001, the FBR is empowered to take actions such as disabling mobile phone, electricity, and gas connections for taxpayers not included in the ATL.
Under this section, the FBR has the authority to issue an income tax general order for individuals who are liable to file returns but are not on the active taxpayers’ list. The consequences outlined in the order may include the disabling of mobile phones or SIM cards, discontinuation of electricity connections, or discontinuation of gas connections.
Additionally, individuals not appearing on the ATL will be deprived of availing the reduced rate of tax during the tax year 2024, according to the FBR. This move serves as a powerful incentive for taxpayers to ensure their compliance with the ATL requirements to secure a place on the list.
As taxpayers navigate the intricate web of compliance, the FBR’s implementation of stringent measures highlights the government’s commitment to fostering a culture of tax compliance and ensuring that individuals and entities fulfill their fiscal responsibilities. The ATL, in this context, becomes not just a list of taxpayers but a crucial tool in encouraging adherence to tax regulations and bolstering the country’s revenue collection efforts.
