The federal government has proposed a sharp increase in the fee required to restore taxpayer status on the Federal Board of Revenue’s (FBR) Active Taxpayers List (ATL), raising the cost of filing income taimprove it x returns by 2,400 percent after the deadline.
Under the Finance Bill 2026, amendments to Section 182A of the Income Tax Ordinance, 2001 would increase the ATL restoration surcharge for individuals from Rs. 1,000 to Rs. 25,000, a 25-fold increase equivalent to 2,400 percent.
The proposed changes also raise the surcharge for other taxpayer categories. Associations of Persons (AOPs) would pay Rs. 50,000 instead of Rs. 10,000, while companies would face a fee of Rs. 100,000, up from Rs. 20,000.
The ATL is maintained by FBR and includes taxpayers who submit their income tax returns within the prescribed deadline. Those who fail to file on time are removed from the list and become subject to higher withholding tax rates on a wide range of transactions, including banking activities, property purchases, vehicle registration, and foreign travel.
Currently, late filers can regain ATL status by submitting their overdue returns and paying a relatively small surcharge. The government believes the existing charges have failed to discourage habitual late filing and is seeking to make timely compliance more financially compelling from July 2026.
According to the Finance Bill, the revised surcharge structure is intended to strengthen tax compliance and support broader revenue collection efforts.
If approved by Parliament, the new ATL restoration charges will take effect from July 1, 2026, making late tax filing considerably more expensive for individuals and businesses alike.
