The Federal Board of Revenue (FBR) may not extend the last date (December 8) for filing of income tax returns for the tax year 2020, senior tax officials revealed to ProPakistani.
Sources familiar with the matter told ProPakistani that if the FBR announces any extension in the date for return filing, it would be after the expiry of the due date to ensure maximum filing of returns by the deadline of December 8. The decision would be taken in light of the exact number of returns to be filed by December 8, 2020. So far, no decision has been taken regarding the extension for return filing.
On the other hand, a leading tax expert informed ProPakistani that the draft simplified return for manufacturers (for Individuals & AOP having turnover of less than Rs. 50 million) has been introduced vide SRO 1261 dated 26.9.2020. The last page of the SRO 1261 stated that this return would be applicable for the Tax Year 2020. It is expected that this would be one of the major reasons for the extension date. The final version of the return was expected in seven days but has not been issued so far.
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Karachi Tax Bar Association (KTBA) has informed the FBR that regrettably, the incorrect computational issues persist, and tax advisers are facing severe difficulties and are under extreme pressure because of the two main issues.
They cannot file the returns on the forms presently available on the IRIS, with wrong formulas, calculating erroneous tax and the resurgence of the currently ongoing, since past many days, the dangerous life-threatening the second wave of COVID-19, which has not only gripped the taxpayers but has also affected the members of KTBA in particular and tax consultants in general and their staff.
Pakistan Tax Bar Association has approached FBR Chairman for an extension in date for filing of income tax returns till January 2021.
In a letter to the FBR, the PTBA stated that the second wave of COVID-19 emerged in the country, which is much dangerous as compared to the 1st wave as per National Command & Operation Centre (NCOC) Pakistan. It is pertinent to mention here that several areas of the county are under lockdown, smart lockdown, and micro lockdown due to the COVID-19 situation.
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The letter further states that as per the instructions of the FBR, only 50 percent of the employees are working in this situation, which also strengthens our contention that generally, the people and particularly the taxpayers are facing hardship during the current situation of COVID-19.
“No doubt that the COVID-19 has adversely affected the whole world, even the Asian countries are also suffering hardship due to COVID-19. It is worth mentioning that normal life and normal business activities are not going on due to the COVID-19 situation, which can be evaluated from the fact that even the Government of India has further extended time for filing of returns till January 31, 2021, from the original due date i.e., July 31, 2020,” said the letter.
Thus, timely filing of returns of income for the tax year 2020 in this situation is not possible.
“Apart from the above situation, we would like to draw your attention towards the issues being faced by the taxpayers in general and by the tax consultants in particular regarding minimum tax liability wrongly calculated by the system while filing income tax returns for the tax year 2020,” added the letter.
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Moreover, the other issues like tax calculation of Behbood saving certificates and profit, etc., are also required to be deployed correctly in the system. Unfortunately, to date, the issue pertaining to the calculation of minimum tax liability by the system is persistent and not resolved, which needs special attention from the Revenue Board.
PTBA has suggested the FBR extend the deadline by 60 days for filing of income tax returns by the taxpayers.
