Karachi, November 1, 2023 – As the Federal Board of Revenue (FBR) received 2.9 million tax returns by the October 31, 2023 deadline for tax year 2023, taxpayers are now clamoring for an extension to the filing deadline.
This comes after the initial deadline was already extended from September 30, 2023.
The FBR’s decision not to extend the deadline beyond October 31 has left taxpayers and other stakeholders concerned. In a surprising turn of events, the number of returns received this year stands at 2.9 million, significantly lower than the approximately 5 million returns filed for tax year 2022.
Tax experts have criticized the FBR, arguing that the low number of returns received is indicative of the authority’s failure to encourage compliance, despite their efforts to broaden the tax base. Last year, the FBR had received over 2.5 million returns by the same date, October 31, 2022.
It’s worth noting that the FBR did report a slight increase in the number of returns filed before the initial September 30 deadline. This year, they received a total of 1.93 million income tax returns, compared to 1.87 million the previous year, reflecting a modest increase of 0.06 million.
Taxpayers and tax experts alike had been hopeful that the FBR would consider an extension to the filing deadline given the lower-than-expected number of returns. They argued that an extension would provide more time for taxpayers to complete their returns and ensure that the tax base is not compromised.
The FBR’s role in expanding the tax base has been a key priority for the government. However, experts believe that the failure to reach the expected number of returns may be a result of several factors. One possible reason is the lack of awareness and understanding of tax regulations among the general public.
Another factor contributing to the lower number of returns could be the perceived complexity of the tax filing process. Many taxpayers may find the paperwork and procedural requirements daunting, deterring them from filing their returns on time.
Tax authorities are urged to simplify the tax filing process and invest in public awareness campaigns to ensure that taxpayers are well-informed about their obligations and rights. Additionally, providing assistance and guidance through digital platforms could make the process more accessible and less intimidating for taxpayers.
The demand for an extended deadline has sparked a debate about the need for a comprehensive tax reform, encompassing not only the filing process but also the tax structure and rates. Taxpayers argue that a fair and transparent tax system would encourage compliance and reduce the need for deadline extensions.
As the government and FBR weigh their options, the 2.9 million returns received for tax year 2023 are an indication of the ongoing challenges in Pakistan’s tax collection system. Whether an extension is granted or not, the focus remains on improving the tax filing process and increasing taxpayer participation, ensuring that the government’s revenue collection goals are met and the tax base is expanded as intended.
