The Federal Board of Revenue informs Finance Minister Asad Umar that the introduction of new and simpler tax returns form may cause a delay and decline this year’s revenue generation.
This, FBR is targeting to collect over 1.5 million income tax returns. However, the board officials told Umar in a recent briefing that they support the call to introduce a simpler return form but the timing may make FBR miss the revenue target.
Earlier, the minister had asked the revenue board to simplify the complex tax return process to attract maximum return filers. In light of this order, the board has announced to introduce a form by the start of November.
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However, in the latest meeting, FBR informed Umar that there are certain hindrances with this development. Asad Umar has been told that the simplified return form should be introduced only after the simplification of tax laws.
It has been reported that FBR officials believe that if they introduce the new form by November; the law requires them to give taxpayers at least two months to file returns. The delay might have a negative impact on revenue collection during 2018-19.
Since the filing process has already begun, there would be return files in two different formats (old and new) by the end of the due date.
FBR would have to deal with two types of forms. The filers on old format would take it as a discriminatory step as they won’t avail the perks given in the new format. This may lead to litigation when cases are selected for audit.
The minister was also informed that the stricter penalties on non-filers have led to a rise in income tax returns in the past couple of years.
The figures from FBR reveal that the number of returns filed in the year 2012 was 835,924 which increased to 1,577,964 in the tax year 2017.
This, according to the board, was possible after penalty in the form of higher tax rates for non-filers introduced in the tax year 2014. The business community and the policymakers have also called for simplification of the tax return process as it was before 2014.
Vision of our new finance minister Mr Asad Umer is pretty good. He talked about bringing reforms to FBR, regarding simpler tax forms, policies and even payments via mobile apps. It’s going to take some time, but it’s better than never.
FBR missing out it’s Revenue targets will be limited to ONE PERIOD only. For all upcoming years/periods, it’ll significantly improve the collections.
There is an urgent need to reform FBR. A simple tax form is the need of the hour. No detailed scrutiny should be done. FBR should work on analysing data which it is collecting from many sources and reconcile it with the tax forms. If the data is not reconciling with the return FBR officer need to engage the Filer to ask further questions in a very nice manner. Even if the person has evaded tax FBR officer should behave nicely and simply reassess and impose reasonable penalty on the tax payer. This will create confidence.
FBR must work hard and smart to:
a) Check massive sales tax evasion and flying invoices
b) Duty evasion by the importers
c) Income tax evasion by the importers
FBR’s Officials Lame excuse for not doing work
Govt official policy is always to slow down/postpone the new process by giving one excuse or the other
Govt must exercise the authority on Govt departments and writ of the Govt must prevail.