Federal Tax Ombudsman (FTO) has issued instructions to the Federal Board of Revenue (FBR) to devise a simple return form for persons earning income exclusively from salary.
According to the FTO’s order, the simplified form supported by the employer’s salary certificate may include an undertaking to the effect that the taxpayer is earning no income other than salary.
Pakistan Revenue Automation Limited (PRAL) may also develop dedicated/simplified software for those persons who are earning income from multiple sources but more than 50 percent of the total income is derived from salary, FTO order added.
The findings of the order revealed that the complaint was filed by a federal government employee in BS-16. He claimed that he cannot afford to pay Rs. 3,000 for filing his tax return therefore his pay slip may be considered an NTN certificate.
The Accountant General of Pakistan (AGPR) issues monthly pay slips after the deduction of tax. Since the filing of income tax return form appears very complicated and cumbersome to the complainant therefore he has to hire the services of a tax consultant/accountant.
Being a low-paid employee he cannot afford to pay the consultant’s fee, therefore, requests that low-paid salaried employees may be exempted from filing income tax returns and may be treated as Active Taxpayers on the basis of the annual salary statement issued by the AGPR/employer.
The FTO order said that there is no denying the fact that the tax return filing process is complex and the majority of taxpayers have to hire the services of tax practitioners or accountants to file their annual returns.
A large number of taxpayers do not file returns due to the simple reason explained by the complainant. It may be recalled that a few years back annual salary statement was considered as good as a tax return but it has been discontinued.
Therefore, the FTO directed the FBR to devise a simple return form for persons earning income exclusively from salary.